Oyo forays into F&B, expects 5-10% additional revenue at hotel level

Hospitality chain Oyo on Thursday announced plans to foray into the food and beverages business with in-house kitchens and quick service restaurants (QSR) across its company-serviced hotels called Townhouse by Oyo.

 

The company stated that the move is expected to contribute 5–10 per cent additional revenue at the hotel level on a stable state basis.

 

As part of this programme, Oyo will cover 1,500 of its company-serviced hotels in FY26, allowing guests to order meals from the in-house dining as well as through online platforms, including Oyo’s own app.

 

The kitchen setup would vary from full-fledged commercial kitchens for an extensive menu to pantry setups for essential food items, based on the individual hotel profile and back-end infrastructure.

 

“In addition to in-house kitchens, the company is also introducing QSR carts and lobby stores under the brand name ‘Townhouse Cafe’, offering ready-to-eat food options and on-the-go customer needs without the wait time of traditional restaurants,” the company stated in a release.

 

The company had launched a pilot programme in January this year across 100 company-serviced hotels in select cities such as Delhi, Gurugram, Hyderabad, and Bengaluru, following which it is being launched nationwide.

 

“The initiative aims to enhance the in-hotel dining experience for guests by offering fresh, convenient, and quality meal options across its network,” said Varun Jain, chief operating officer, Oyo.

 

“To support this, Oyo is developing a network of trusted F&B experts in key cities such as Delhi, Mumbai, Bengaluru, Hyderabad, Pune, Indore, Kolkata, Jaipur, and Lucknow,” Jain added.

 

Oyo’s initiative is expected to improve customer experiences at its company-serviced hotels at a time when more and more Indians are willing to spend on hotel stays amid a premiumisation trend.

 

HVS Anarock said in a recent report on India’s hospitality industry that the branded economy hotel segment, which accounts for just 5–7 per cent of total supply, is emerging as a high-potential growth frontier, particularly in Tier-2, -3 and -4 cities, where value-driven travel is on the rise.

 

“Encouraged by the current momentum, we expect nationwide occupancy to reach 70 per cent and average room rates (ARR) to cross the ₹10,000 mark in 2026," the report noted. ARR climbed to ₹7,800–8,000 in 2024, marking a 7–9 per cent growth over 2023.