Big leisure push on Oyo agenda, co bets on millennials, home stays too

To double the number of rooms from current 70,000 this year

Hotel room aggregator Oyo is planning to increase its presence in leisure cities and would be doubling the number of rooms it offers in its network to 1,40,000 by the end of this year, to become the 14th largest hotel in the world.

Speaking to reporters in Chennai, Ritesh Agarwal, founder and CEO of Oyo said that the company at present has over 70 per cent of its business from the business segment while the rest is from the leisure segment. It is looking at changing this to around 60 per cent and 40 per cent respectively over the next few months and later to a ratio of 50:50, he said.

Leisure rooms would be priced 15-20 per cent higher than business rooms, and 20-30 per cent lower than the nearest three-star hotels, he added. The business segment would also grow during the period. It has also launched Oyo Townhouses, a neighbourhood hotel chain targeting millenials, which would be scaled up from five at present to around 250 by end of this year.

At present, the company has around 7,000 hotels and 70,000 rooms in more than 200 Indian cities and would be expanding to 1,40,000 by the end of the year. This would be mainly through bringing into its fold those rooms in its existing network of hotels that have so far not been offered to it. In order to achieve this, it would enter fresh agreements with such properties to expand its inventory of rooms, Oyo would also be expanding to around 8,500 hotels in its network by the end of the year.

The company has the capital for its current expansion plans, Agarwal said, while refusing to comment on future fund-raising plans. The company is making a positive net margin on each of its units and currently has a double-digit margin. He did not reveal the company's expectations on break even.

The company also has operations in Malaysia and would be soon launching its operations in one more country. It has been looking at expansion in South Asia and South East Asia.

The company would also restart its home stay, service apartment operations, but with a twist, he said, not specifying what  that twist would be.