KabuK Style wants to create diverse culture with its blockchain-powered travel subscription service

As for timing, Kenji Sunada, founder and CEO of KabuK Style, couldn’t have picked a worse moment to launch the online subscription travel service in 2019. “It was very disappointing,” he laughed. “We didn’t expect that in the first year there would be no travel.”

However, Sunada is no stranger to playing the long game, as well as grit and grit. His inspiration to start a travel business that would allow Japanese travelers to lock in hotel rates for a specific period of time with a subscription fee came from a speech John F Kennedy had given at the Space Kennedy Center during his “Man On The Moon” moment.

Kenji Sunada: “Blockchain technology opens up everything…healthy competition is exactly what we need.”

Tell Sunada, “When he asked the janitor what he was doing, the janitor replied, ‘I’m helping put a man on the moon.'” Like in this story, people can find happiness by finding their purpose in something bigger than themselves. Traveling can help us find that sense of purpose. But I didn’t choose to travel just for that limited purpose, it’s more of a vague feeling. If people traveled more, more wonderful things would come out of it.

“We want to develop a price model where people are protected against price changes, so that they can travel more. The reason we tokenize reservations is because we believe the travel industry’s increasingly complex system raises barriers to entry due to the enormous cost of simply connecting systems. Blockchain technology opens up everything. It decentralizes. When new services can more easily access inventory, innovation in the industry will accelerate, guests will be better served, and the overall market size of the industry will grow. We believe that healthy competition is exactly what we need.”

It’s a formula that seems to work. In the four years since its launch, KabuK has sold over 300,000 room nights. Subscribers lock in a price for three months and then travel when they want. In other words, KabuK acts like a bank, and Sunada acknowledges that it is a very cash-friendly business.

“We are an opaque market, and that makes it easy for hotels to partner with us,” he said.

In March 2020, it raised 1 billion yen from top-tier investors such as JR WEST INNOVATIONS and NEC Capital Solutions, and another 125 million yen in April 2021. In total, Sunada said the company has raised more than US$30 million since launch.

While the business is mainly hotels at the moment, . It conducted a trial period with Japan Airlines where from August to November 2021 they offered a subscription service for JPY36,000 where customers could book on 10 routes from Haneda Airport (Tokyo) (Shin-Chitose, Kushiro, Yamagata, Komatsu, Nanki-Shirahama, Kochi, Nagasaki, Miyazaki, Naha, Miyako).

A total of 500 HafH members registered. “We found that 80% of participants signed up without a destination in mind, their first trip was to a well-known destination, but after that the next two trips were to lesser-known places – which gives us hope that we can diversify destination and spark regional revitalization, Sunada said.

It conducted another test from June 2022 to March 2023, and after the success of the two tests, KabuK Style and JAL will now perform direct system integration without going through other services. “We will begin beta testing an airline subscription service that allows instant purchase of JAL flight tickets through HafH from May 11, 2023,” KabuK said.

It is currently working on a trial with Japan Railways to sell train tickets in a similar model.

Sunada’s knowledge of price changes came from his trading background in the financial markets. In fact, he started at 10 a.m. when he traded with his father’s account. Fortunately, he earned money for dad. Discovering this knack for trading, he went on to build a career in banking and finance, working on mega deals.

But in the back of my mind was always the desire to do something in travel, and saw it as an industry that could cross borders. KabuK Style, as an idea, was conceptualized in 2008. “I was a good trader, I loved it, but I was curious about the concept of pricing. Why does the price change when the value of the product or company does not change? Why are share prices so volatile? My personal goal is to ask why does the price have to change?”

What KabuK does is acquire rooms at wholesale prices, fix the price and sell to consumers for a fixed subscription fee. “About 60% of our customers are in their 20s and 30s, which is a younger demographic than regular travel services, but recently we’ve seen a lot of usage from people in their 40s and 50s. , and its . It is a unique channel for younger consumers, who are influencers in their own right.”

It currently has approximately 2,000 hotels globally in 30 countries, more than half of which are in Japan. The business is mainly domestic right now, but it is expanding into other markets, with South Korea being its first stop. It bought a local hotel revenue management system in Busan last year, and in February it established a South Korean office and launched the service in South Korea two months later. It is looking at Taiwan and Malaysia as potential markets.

“Technology will change the travel industry and we will continue to invest in technology to deliver on our mission to create a diverse culture through travel,” Sunada said.

Note: Kenji Sunada will speak at WiT Japan and North Asia, Tokyo, 5-6. July, about his expansion plans outside of Japan and how he intends to scale his fixed-price model to other markets. Check the program here and register here.