|Chung Myung-hoon, chief executive at Good Choice Company, better known as Yeogi Eottae, Korea's leading travel technology startup, poses during a recent interview with The Korea Times at its headquarters in Samseong-dong, southern Seoul. Courtesy of Good Choice Company|
CEO says Good Choice Company has no immediate plan to go public
By Kim Yoo-chul
For Chung Myung-hoon, chief executive of the Good Choice Company, the secret to the success of one of Korea's top accommodation booking platforms is not the latest technology or savvy marketing campaign.
The secret to the company's success, he says, is making sure employees have a concrete understanding of their common goals and are compelled to achieve them.
Chung said his job as the CEO is to articulate what his employees are actually doing and why, instead of simply handing them a list of goals.
"This also means that there's no contest about having people to work with. This is why I've set my first mission, here, as the company CEO for in-person meetings with all employees. I've just tried to find out a common ground with them about desired deliverables and values because it's the CEO who should work closely with employees for the creation of a shared vision," Chung told The Korea Times in a recent interview at the company's head office in Samseong-dong, southern Seoul.
|Tourists walk through a promenade lined with souvenir shops leading to the Sensoji Buddhist temple in the famed Asakusa district of Tokyo on Oct. 17, 2022. A cheaper yen is a plus for inbound tourism, enticing travelers who have dollars with more spending power. AP-Yonhap|
Before joining the company, better known as Yeogi Eottae, which means "How about this place?" in Korean, Chung was the Korea head of CVC Capital Partners, a U.K.-based private equity fund (PEF). Chung played a leading role in helping the PEF acquire the Good Choice Company.
"I had no questions about the growth potential of the company," he said.
Moving to a platform company from an investment firm is rarely seen in Korea. When he joined Good Choice Company in 2021, there were only 400 employees.
"I did try for clear communication with employees, specifically regarding the company's strategic vision and near-term achievables for the company as I am fully responsible for putting growth plans into action, beginning in the early stage based on a consensus with the employees," the CEO said.
Employee retention, which highlights how many workers choose to stay at a company, went up significantly.
"We are situated to create something valuable from human resource management," Chung said.
Founded in 2014, the accommodation platform has displayed a meteoric rise in terms of profit growth.
Last year, it reported 204 billion won in revenue, up 59.2 percent year-on-year, while operating profit rose 36.7 percent to 15.4 billion won, the company said in a filing to Korea Exchange (KRX). More than 36 million of its apps have been downloaded and over 17 million people are users as of October this year, according to the company.
When Mirae Asset Capital joined KDB Capital and GS Retail in a $35 million, or 50 billion won, funding round in April this year, Good Choice Company was valued at over 1.2 trillion won, or around $1 billion, and was recognized as unicorn. Institutional investors expect the valuation of the company to reach a maximum of 6 trillion won when it goes public.
Global expansion, but no rush for IPO
Now, the company is gearing up for its next step.
As the leisure and travel industries are seeing signs of improvement, Chung said his firm is focused on developing new products, including short-term stay packages in Japan and Southeast Asia.
|A woman walks in front of an electronic monitor displaying the movement of the Japanese yen against the U.S. dollar outside a brokerage in Tokyo, Japan on Oct. 14, 2022. Reuters-Yonhap|
"Obviously, Good Choice Company kept trudging on and found light at the end of the tunnel. While we are unsure travel demand by Koreans will return to pre-pandemic levels, it's true that travel demand is bouncing back and we are set to offer lots of choices for those who are looking for short-term travel options. Japan and countries in Southeast Asia are our prime targets," said the CEO.
Behind its focus on Japan and Southeast Asia is the depreciation of the Korean currency. The won has been the worst performer among Asian currencies, weakening more than 17 percent against the greenback so far this year.
While the won's depreciation increases the cost burden for Koreans going on overseas trips, falling oil prices have rekindled the appetites of Koreans to travel abroad. Thailand, Guam, Saipan, Vietnam, China and Indonesia are considered one of the favorite destinations of Koreans. The weak Chinese yuan and the Japanese yen against the dollar are cited as the factors for the Good Choice Company to further promote its accommodation packages, according to the CEO.
"For the first nine months of this year, the volume of transactions surpassed 1 trillion won as last year's total transaction volume reached 1 trillion won. Airline and accommodation booking for overseas travel drove the growth of transaction volume. Seventy percent out of some 4.3 million monthly visitors to our app are millennials," Chung added.
The recent funding be used to promote global expansion activities that had to take a back seat during the COVID-19 pandemic, he said, adding that investments for product (app) development are also planned.
"We need to be competitive enough. Because the company is on track to pursuing a global expansion strategy, as an initial step, we have to be focused on selling booking services quite competitively," according to the chief executive.
Its mainstay businesses have expanded to resort-, space-, and car-rentals. "We are eyeing M&A chances in accordance with the company's global expansion strategy. However, acquisition deals will only be sealed after a thorough review process."
While the company is expected to go public in 2025 at the earliest, with Mirae Asset Capital hoping the Good Choice Company to report some 550 billion won in sales and 76 billion won in operating profit by then, Chung said there is no date set so for an initial public offering.
"We had considered an IPO, but no specific date has been set because it's too early to make it official," said the top executive.
Chung's rather cautious stance toward the IPO came after the U.S. Federal Reserve's hawkish monetary policy and higher interest rates dried up cheap money that mainly drove sizable IPOs and investors' appetites for risky new issues.
While the company's chief competitor, Yanolja, is said to have initiated necessary steps for an IPO, Good Choice Company has put its listing plans on hold until the leisure and travel markets display a visible rebound.
"We have to wait for better conditions before eventually pulling the trigger," Chung said.