Move over IHG, Oyo claims the world's 3rd largest chain position
India's fast-growing budget hotel chain Oyo announced itself as the third largest hotel chain in the world in terms of room count. By taking its total room count from 636,000 rooms in April to 850 rooms in June – all in a matter of two months, the Indian firm claims to have risen three positions from the sixth largest, by overtaking Accor hotels, Wyndham Hotels & Resorts and InterContinental Hotels Group.
With over two million rooms in Southeast Asia alone, (Operating over12,000 hotels in 337 cities in India, Malaysia, UAE, Nepal, China and Indonesia), Oyo’s founder and CEO Ritesh Agarwal says the budget chain will become the world’s largest hotel chain, in scale, revenue and margin by the year 2023.
Oyo Rooms owns and operates a chain of budget hotels that allow guests to book accommodation via mobile application. To climb to number one position, it will need to nudge Hilton Hotels and Marriott International out of its path, on its goal to get to the top.
Oyo headquartered in Gurugram, Haryana, India, accounts for the swift jump in rooms in two months to China where, in a press statement on June 25 it claimed to have more than 500,000 rooms, making it the country’s largest hotel brand.
With the backing of Softbank, Oyo plans to invest US$ 300 million in expanding its presence in the US, where it is presently opening one hotel every day. Oyo’s Ritesh Agarwal is setting his sights on an opening rate of five hotels per day, but cautions that ‘getting it right is is more important than doing it fast’.
The company, apart from been supported by Airbnb, which has invested more than US$ 100 million, receives funding from several private equity groups.
Oyo, by offering a franchise model which it claims will enable operators boost revenues by 100 percent within six months, has capitalised on the fact that fees for listing on online booking sites have increasingly become expensive, especially for standalone or independent operators who, lack the leverage that chain hotels posses to negotiate a less costly deal.
Since its launch in 2013, Oyo has grown through a hybrid online travel agency-come- hotel franchise model. Currently, OYO's top competitors are Treebo, FabHotels and Vista Rooms.
Report by in2ition |
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