Urban dwellers have, at least once, dreamed of taking a spontaneous trip with little or no planning.

Kim Ka-young, cofounder of Bonbonlab, the developer of hotel booking application Hotel Now, was one of them.

When Kim was in her senior year at a local university, she randomly took a train to Busan without planning what to do and where to stay.

She then realized that there was no affordable accommodation available for her that night.

She contacted some 20 hotels and hostels, but they demanded a surcharge for the last-minute booking.

“Hotels raised the room rates as the check-in time got closer,” said Kim, 27, in an interview.

“It was a shame that customers who could not book a room in advance had to bite the bullet and pay for overpriced rooms.”

This painful experience gave her the idea of creating the same-day hotel booking app, which is similar to the U.S.-based HotelTonight, which offers discounts up to the last minute.

Kim, who was accepted to a law school at the time, gave up her legal ambitions and used her tuition money of 40 million won ($37,000) to launch Hotel Now with two of her friends in October 2013.

The app allows users to book rooms at 945 luxury and budget hotels at up to 70 percent off listed rates.

The list of available rooms refreshes at 9 a.m. every morning.

More than 500,000 people have downloaded the free app for iPhone and Android, with sales growing by an average of 30 percent a year.

Kim had some doubts, thinking the Korean market may be too small for the hotel app to grow.

But the app became a huge hit thanks to young smartphone users in their 20s and 30s.

“As a platform, Hotel Now, which helped hotels to reduce the number of empty rooms and offered the cheapest deals to users, turned out to be win-win for both parties,” Kim said.

Similar apps such as Daily Hotel and Hottel emerged in the market.

Online shopping giants such as Interpark also expanded their hotel booking services to offer last-minute affordable deals.

“For a startup like (Bonbonlab’s) Hotel Now, it gets more difficult to maintain our position in the market amid growing competition,” Kim said.

“But the bright side is that more players mean that the market is expanding and reaching out to more customers.”

Hotel Now is set to launch a website and a Chinese service this summer to accommodate the soaring number of Chinese tourists, with plans to expand overseas in the near future.

By Ock Hyun-ju (laeticia.ock@heraldcorp.com)