SoftBank-funded start-up OYO Hotels, the largest Indian hotel brand by number of rooms, aims to emerge as the world’s largest hotel brand by adding over a million rooms globally in four to five years. Marriott is currently the world’s largest hotel brand with about 1.4 million rooms. OYO aspires to overtake Marriott by 2023. “We aspire to be the world’s largest hotel company built out of Asia with markets in India and China. Currently, Marriott is the largest and we have a lot of respect for the company. We aspire to be bigger than that. We have already built in the growth rate at which they have been growing in the past couple of years to set our target for 2023,” said Ritesh Agarwal, founder and group CEO at OYO Hotels.
Founded only four-and-a-half years ago, OYO has expanded from only 20 rooms and a single hotel brand to 330,000 rooms across over 12,000 franchised hotels in seven markets, including India, China, and the United Kingdom.
“We are adding over 50,000 new keys a month. It is a pretty meaningful scale that puts us in the league of the world’s fastest growing hotel chains,” said Agarwal. OYO started as a budget chain, but now caters to mid- and upper-end travellers through Townhouse and Palette Resorts.
Besides India and China where OYO has the maximum number of rooms, the brand is present in the UK, the UAE, Indonesia, Malaysia, and Nepal. It will enter more markets in the run-up to 2023, though Agarwal is tight-lipped about the next geographies on OYO’s radar.
The start-up raised $1 billion in September from investors including SoftBank. The last fund raise valued the company at $5 billion. The bulk of the spend from the outlay of $1.2 billion (OYO already had $200 million before the last funding happened) will be towards expansion in India and China. OYO has an inventory of about 143,000 rooms in India and over 180,000 in China, where it is already among the top 10 brands in room count. OYO will have to raise further funds in the near future to step up the expansion rate.
China, which has approximately 35 million unbranded rooms and Agarwal sees a big opportunity to scale up further. India has only 4.3 million unbranded rooms. OYO recently brought on board Aditya Ghosh, former Indigo president, as chief executive officer of India and South Asia. That allows Agarwal to focus on global markets, particularly China.
“We will need a management group that is more than stellar to achieve our plans. We will need competencies that are more than stellar. People who will come and challenge me and OYO to think in a more rounded manner,” said Agarwal referring to Ghosh’s appointment.