The fast-growing Indian hotel chain is to invest $300 mln in US

Oyo, the fast-growing Indian hotel chain backed by Softbank’s Vision Fund, is to invest $300 million in an aggressive expansion in the US where it is already opening an average of one hotel a day. The hotel start-up, which was valued at $5 billion in its last funding round in September, claims to be the world’s sixth-largest hotel chain. Since its launch in 2013, Oyo has grown through a hybrid online travel agency-come-hotel franchise model. The company has more than 50 hotels in 35 cities in the US, including Dallas, Houston and Atlanta. Oyo said it would use the $300 million investment “to continue to grow at a scorching pace” with expansion into bigger cities, such as New York, San Francisco and Los Angeles…Oyo has also looked to expand beyond hotels. In 2017 it set up Oyo Home, an online platform for short home rentals, and in May this year it bought the European short-term property rental company @Leisure for €369.5 million. Oyo’s growth has come as fees for hotels to list on online booking sites have grown increasingly expensive, particularly for independent operators that do not have the heft of the big brands such as Marriott and Hilton to negotiatebetter deals. It offers independent operators a franchise model, which Oyo claims will lead to them increasing their revenues by 100 per cent in six months.
Alice Hancock