Indian unicorn Oyo Hotels & Homes, one of the fastest expanding hotel management companies in the world, hopes to replicate in the US the success it had in India and China in becoming one of the top two hospitality groups, a media report says. The lodging operator that opened its first US hotel early this year will invest $300 million for the US expansion, Ritesh Agarwal, chief executive officer, said in an interview.
The company backed by Softbank's Vision Fund will deploy more properties and personnel to expand in the market, the report in Business Standard quotes Agarwal as saying. The Gurugram-based group is adding hotels at the pace of one a day, and aims to expand its US offerings at five times that rate by the end of the year, the report says.
"So far we've been very focused on, build a good product and price it very effectively for the consumer," Agarwal said. "We want to make sure that we do it right rather than just do it fast. If that means three a day and not five a day, life goes on."
Odisha-born Agarwal founded Oyo six years ago aged 19 to fill the gap of good, affordable hotels. The company now operates more than 23,000 properties with more than 850,000 rooms, making it one of the world's top five lodging providers. Industry observers say Oyo is flush with cash as its rapid growth has attracted a surfeit of venture capital funding. Last year the group received $1 billion funding from investors including SoftBank, Sequoia Capital and Lightspeed Ventures.
Excited at the journey ahead for OYO in our home market, the US, as we bring value chic, 'comfort design' based, pop & lively living spaces in 10+ States starting with Dallas, Houston, Miami and more with a unique proposition specifically made for USAhttps://t.co/tzmBDYBDMz pic.twitter.com/sYFkDA2hKy— Ritesh Agarwal (@riteshagar) June 19, 2019
Agarwal says the group attracts customers with chic yet approachable aesthetics and affordable prices, the rooms that typically cost $60 to $110 a night. At those price points, the company is competing with a wide range of brands, including Days Inn by Wyndham and Tru by Hilton, the report adds.
The company's strategy is to attract property owners with the guarantee of a set level of profits and financing renovation. Oyo takes less than a month to open a hotel, according to Agarwal, and the company works on five-year contracts that could appeal more to owners. The property owners are also happy to part with a higher share of the revenue when Oyo invests in capital improvements.
The company with a marked presence in India and China has properties across Asia-Pacific and the Middle East and is already operating more than 50 properties across US cities including Dallas, Houston, Atlanta and Miami.