SoftBank-backed Oyo Hotels enters premium segment

OYO in Manali, India. Photo: OYO Rooms

Oyo Hotels and Homes, the world’s third-largest and fastest-growing chain of hotels, homes, and living space, is entering the four-star hotels segment in India with the purchase of a 64-suite building in Ahmedabad for an undisclosed amount. Oyo has partnered with Gurugram-based hospitality firm Mountania Developers for the transaction and to redesign the building into a premium hotel by the end of this year.

Last month, in its first property purchase in the US, SoftBankbacked Oyo had bought the Hooters Casino Hotel in Las Vegas. Oyo and Highgate, an American real estate investment and hospitality management company, are putting in $135 million for developing the asset.

So far, Oyo was associated with budget- and mid-segment hotels in India. Now, it will also cater to business travellers. The company also plans to add more premium and upscale hotels.

Oyo will work with Mountania, which will help acquire assets, while Oyo will leverage its expertise in property on-boarding, renovation, and redesigning.

“This (premium) segment holds a lot of promise for us given the rapid growth of the hospitality industry over the last few years. The global upscale and luxury hotel market is predicted to witness tremendous growth and, at Oyo, we want to leverage this opportunity to enable our guests to experience living the good life, even while travelling for business,” said Aditya Ghosh, chief executive, India and South Asia, Oyo Hotels and Homes.

“We believe that our deep understanding of Indian consumers and trends, coupled with our operational and technological capabilities, will be a game-changer for us in the upscale segment,” he said.

Oyo aims to enter the five-star and seven-star hotels categories as well. It is in advanced talks with owners of at least 10 such properties, said one person aware of the matter, requesting anonymity. The premium and luxury properties are across India.

Oyo has been on a buying spree in the hotels asset space. In May, it had agreed to acquire Amsterdam-based @Leisure Group from Axel Springer, a media and technology company, for an undisclosed amount.

@Leisure is a vacation rental company based in Europe, which manages holiday homes and holiday parks, as well as holiday apartments.

Oyo claims to have a balance sheet of about $1.5 billion. It has raised nearly $1.7 billion in funding over 12 rounds.

The article was first reported on Livemint.com