Beginning from a single hotel in May 2013, OYO has become India's largest hospitality company, having a presence across 259 cities with around 173,000 hotel rooms in the country.
OYO, founded by Ritesh Agarwal, has recorded global sales run-rate of $1.8 billion in December 2018, growing at 4.3X, and its India business was growing at 3X with a sales run-rate of $1.2 billion annually.
OYO started as a hotel network that offers standardized and hassle-free stay experiences. But today, the company’s portfolio includes six brands, OYO Rooms, Townhouse, SilverKey, Collection O, Capital O and Palette Resorts. Recently, Hospitality unicorn OYO has forayed into a co-working space brand by launching ‘Powerstation’.
OYO enters co-working space
Everything around us is changing and the place where we want to work is no exception. While many independent entrepreneurs effectively run their businesses from their homes, coffee shops or other public spaces, the rest look for a more professional workspace for meetings, and to separate personal and professional life. This is where the concept of co-working space comes as it helps a small startup, an independent entrepreneur, or a freelancer to find an affordable workspace. And as the demand for the co-working space has increased in recent years, more companies are venturing into this segment.
Powerstation by OYO is a fully managed workspace for medium and large businesses, startups, and freelancers. The company has launched its first centre with a 500-seater space in Gurugram. It is aiming to expand to Bengaluru, Mumbai and Hyderabad in 2019 itself.
The company is further planning to introduce three brands in the co-working industry, including Workflo, PowerStation and Innov8. While Workflo and PowerStation will be placed in its mid to budget category, Innov8 will be in the premium category.
In the co-working segment, OYO will compete with nearly 200 co-working spaces currently functioning in India such as New York-based WeWork, 91springboard, Sequoia-backed Awfis among others.
On a Jet Set Expansion Mode
Today, OYO is India’s largest hotel chain with 173,000 rooms under management and sits at the world’s third largest position, with more than half a million rooms over the 18,000 properties that it presently franchises and leases in 500 cities across 10 countries.
After successfully growing its business in home markets, India and China, and launching its operations across countries, including Malaysia, Nepal, Dubai and Indonesia, OYO has commenced operations in its third and potentially the largest home market, Japan.
In February, the Ritesh Agarwal-led firm has formed a joint venture to begin OYO LIFE services in Tokyo, with over 1,000 residential units, under which it will be providing technology-driven rental housing products to Japanese students, citizens, and young professionals.
On this launch, Ritesh Agarwal, Founder and Group Chief Executive Officer, OYO Hotels and Homes, said, "OYO LIFE is geared to provide a hassle-free, tech-driven, upgraded living experience at an affordable price in Japan. The service has gone live with over 1,000 keys across Tokyo. We have already received over 11,000 pre-registration and there is strong interest coming from students and young professionals."
Recently, in order to expand its presence in the Japanese market, OYO has formed a joint venture with Tokyo-based SoftBank Corp and SoftBank Vision Fund for introducing its hotel operations in Japan. This joint venture will be named as OYO Hotels Japan GK.
Commenting on this joint venture, Ken Miyauchi, President and CEO, SoftBank Corp, said, "We are delighted to deliver OYO's innovative service to the Japanese market. Given our shared vision for a digital future, we are excited to support a Vision Fund portfolio company in deploying cutting edge technologies and services to Japan. Combining OYO's most advanced business model with SoftBank Corp's knowledge of the Japanese market, we will provide brand-new hotel experience to travellers in Japan."
Ritesh further added, "Japan is fast emerging as one of the most popular tourist destinations in Asia. We, at OYO Hotels & Homes, see this as a huge opportunity and are excited to contribute towards the growth of the local economy by promoting tourism."
Future plans
OYO aims to become the world’s largest hotel chain by 2023.
"Our belief is that if we just keep opening 50,000 keys a month, then by 2023 we would have opened roughly 2.5 million more rooms, which will be at least 2 times of what the world's largest hotel chain is today," Agarwal stated.
