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OYO empowering small hotel through standardisation, financial support

  • 17 December 2018

Abhinav Sinha, Chief Operating Officer, OYO talks about the strategy behind the Group’s expansion plan

OYO is now present in over 500 cities across India, China, Malaysia, Nepal, Indonesia, UK and the UAE. It has over 12,000 leased and franchised rooms and 3,000 homes part of our chain with over 330,000 rooms. 

There have been innovations one after another at OYO. Recently, you started facilitating micro and small enterprise loans under the Mudra and CGTMSE Schemes. Can you share details about these schemes? How are the schemes for SMEs helping you achieving your goal?

In the recent past, we have seen an increase in demand for affordable and predictable stay experiences among SMEs and MSMEs as there was an uptick in their business travel. In this scenario, it was important to empower small budget hotels and ensure that they receive the best transformation and staff training to deliver good customer experience for travellers.  The micro and small enterprise loans under the Mudra and CGTMSE schemes are to facilitate our hotel owners and support them with technology, operational excellence and award-winning service. Moreover, recently, we have signed MoUs with the State Bank of India and Bank of Baroda to enable financial support for our existing and potential hotel owners for fuelling transformation and standardization at their properties. This will also allow us to create thousands of jobs in Tier II and III cities by nurturing micro-entrepreneurs in the hospitality sector.

Apart from India, you have forayed into China, Malaysia, Nepal, Indonesia, the UK and UAE in the Middle East. Now, you are planning to enter to Japan market. What is your overseas expansion plan and how many countries are on your radar?

While we have nothing new to announce at the moment, we can confirm that we are actively looking at expanding our global footprints. We will be focusing on markets in Southeast Asia, Middle East, and beyond. We will do all of this while not just strengthening our presence and reach in our home markets and other existing markets, but will do all of this while improving our quality and experience for customers and yields for asset owners.

Of $800 million coming in, OYO is investing $600 million in China. Where do you use in China in next two years?

China is our home market and we will continue to invest in this market, in addition to expanding our business in other international markets. In just one year of our operations in this country, we have now over 180,000 rooms across 285 cities in 4,000+ exclusive franchised and manchised hotels. We have also emerged as one of the top five hotel chains here.

We have invested a significant part of the funds from the recent financing round, approximately $600 Million in this market out of which we will be using $300 million for renovation and infrastructure investments. This additional investment, we believe will help us drive the next wave of growth in China, which is already ahead of India, that too in a much shorter span. We wish to move forward and expand in China with our vision of creating beautiful living spaces for travellers while driving high yields for asset owners.

You aim to become the largest chain of hotels globally by 2023. How do you plan to achieve that?

Our growth and expansion are depended on the kind of competencies we have built for OYO. We have been able to create strong competencies in renovation, asset management, revenue management and skilling. Also, we make sure that any activity we do will revolve around these competencies. The first thing is to create competencies and then scale in a product in the home market. Globally, we are adding over 50,000 new keys a month. It is a pretty meaningful scale that puts us in the league of the world's fastest growing hotel chains.

What is the growth plan for Townhouse?

OYO Townhouse was launched in January 2017 and from then to now, the response to our offering has been overwhelming. Quite recently, we launched our 51st OYO Townhouse in Jaipur. The category enjoys a strong occupancy of 90%+ with 80% and above guests giving us the highest ratings post their stay. Our aim is to continue expanding our presence in the mid-segment category in India with Townhouse and plan to take this number to 400-500 hotels by the end of 2019. 

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