Hotel chain

Founded in India in 2013, OYO stands out as the world’s fastest growing company and the world’s 6th largest chain of operated hotels, homes, managed living and work spaces. Oyo has a global footprint covering 18 countries worldwide. As of January 1, 2019 it had 8,500 hotels for 458,296 rooms in 8 countries worldwide, an amount multiplied by 8.7 compared to 2018, placing it in 8th place in the world ranking (Hospitality ON data as of 1 January 2019).

OYO was founded as an online hotel marketplace in 2013 by 19-year-old college dropout Ritesh Agarwal. It has an international ambition to surpass Marriott by 2023. The Indian startup already claims 458,000 rooms in 8 countries. Of this fleet, 271,000 are in China, where the brand debuted in January 2018.

The model is simple: it adopts hotels to bring them into its fold, gets them to adopt certain standards of services, features, staff, pricing, security and then sells their rooms under its own brand, for a certain cut.

OYO doesn't own any of the properties. It invests in improving marketing and management quality for the hotels in its fold. In India, standards are not followed and owners are not necessarily professionally trained or suited the hospitality space and it can be difficult to fund hotel improvements.

The company is in “invest and expand” mode, primarily funding its technology, hiring and marketing development activities and has attracted four rounds of investors including Huazhu Hotel Group, which made a strategic investment of $10 million in September 2017.

“Our primary focus is to strengthen our foothold further in India. We are happy to state that we have reached 100,000 keys and are confident to reach 180,000 keys by this year. In an endeavor to deepen our network and commitment as South Asia’s largest hotel chain, we have expanded into Malaysia, Nepal and China, where we have over 5,500 assets partners,” said an OYO spokesperson.

Within months of launching operations in China, OYO looked to set up business in Indonesia, the UK and other European countries where it wishes to expand rapidly.

OYO has over 5,000 exclusive hotels as a part of its franchised, manachised and leased chain which is spread across 150 cities in India.

In late 2017, OYO launched OYO Home, an Airbnb-like marketplace for short-term managed rentals. In April 2018, the first international OYO Home was launched in Dubai.

OYO receives support from investors such as SoftBank Group (which has invested in Uber and Wework), Lightspeed India, Sequoia, Greenoaks Capital, Hero Enterprise and China Lodging Group offers India great development prospects.

After the economy offer, the Indian group moved into the midscale with OYO Town House (74 properties at the end of 2018 according to the group) and into the upscale with the Palette brand. The group is also setting foot in the housing sector with OYO Living, a concept dedicated to millennials and the rental of holidays with OYO Home or apartments with OYO SILVERKEY. It is now developing on the luxury segment in Saudi Arabia.

To pursue its international expansion and diversification, the startup has raised new funds - $1.5 billion - with a Series F funding round. RA Hospitality Holdings’ will inject $700 million, after having received approval to invest $2 billion in OYO earlier this year. The rest of the new funds ($800 million) will come from multiple investors. At the same time, Lightspeed Venture Partners and Sequoia sold part of their shares to OYO’s founder and CEO.

Ritesh Agarwal announced that the company has improved its EBITDA by 50% on a year-on-year basis, meaning that they are “operating profitably at the building level” as he said. These funds will be used to further diversify the company’s portfolio and support management and operation of OYO's five-star and luxury properties.

OYO Hotels & Homes will invest $1 billion in the Saudi luxury hotel market. The group will add luxury properties, but also mid-range, premium and high-end properties to its portfolio in this market, which already includes 130 properties, or 6,500 keys in 14 Saudi cities.

An untapped opportunity will come with the new visa to facilitate tourist stays in Saudi Arabia. This measure aims to achieve the target of 100 million tourists per year by 2030, compared to 17.7 million in 2018. OYO will set up 2 training institutes in Riyadh and Jeddah, to train “hospitality enthusiasts” with OYO hospitality standards in the Kingdom.



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