India's Oyo Hotels plans Southeast Asia growth

The Oyo 110 Asiatel Hotel reported an increase in occupancy after it joined the Oyo portfolio. Photo credit: Oyo Hotels

Indian hospitality chain Oyo Hotels and Homes claims to have 260,000 franchised and leased rooms and more than 5,000 hotels under franchise in 280 cities across China, its second home market—and is still looking to gain ground throughout Asia, particularly in the southeast. 

The company has spent $100 million to strengthen its presence in Indonesia, starting its operations in the country with 30 franchised hotels and 1,000 rooms in Jakarta, Surabaya, and Palembang. In three months, that number grew to more than 150 hotels and 4,100 rooms in six cities. The company now aims to expand to 100 cities by the end of the year.

The company also plans to invest more than $50 million in the Philippines market and has 21 franchised and leased hotels with more than 500 rooms in Metro Manila, Tagaytay and Cebu. Ultimately, Oyo is looking to have about 20,000 rooms across the Philippines' major markets, including Cebu City and Boracay.

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"We are planning to go to more than 10 markets within this year itself," Abhinav Sinha, Oyo Hotels and Homes' global COO, told local paper Business World. "The investment will be across technology, across infrastructure innovation and across building a very strong local team in the country.”  

The Philippines set a record for inbound tourism in 2018 with more than 7.1 million international arrivals, according to the Department of Tourism. This surpassed the 6.6 million arrivals set in 2017.

Chinese travelers made up more than 1.2 million of 2018's visitors.

Sinha credited the islands' appeal for hotel development to not only the inbound tourism numbers, but the strength of its local economy and the overall size of the hotel industry. Oyo, he said, is "very, very committed" to expansion throughout the Philippines.

The company's  hotels have seen occupancy growth upon rebranding as Oyo properties, Sinha told Business World. The Oyo 110 Asiatel Hotel by the Ninoy Aquino International Airport reported an increase in occupancy from 63 percent to 82 percent three months after adopting the Oyo brand name.

Looking ahead, the company is poised to enter Bali in the next 11 months. 

Oyo currently operates more than 13,000 franchised or leased hotels and more than 3,000 homes worldwide. It operates by rebranding small and independent hotels, primarily on a franchise model. Local entrepreneurs are required to have their properties refurbished to Oyo’s specifications and pay a commission on each booking. The majority have a few dozen rooms and the company lets owners franchise, lease and renovate hotels in between three and 14 days.

In September, Oyo Hotels received $800 million in investment by SoftBank, Lightspeed, Sequoia and Greenoaks capital out of which the hotel chain has committed $600 million to China, its second home market after India. Since 2013, Oyo has expanded across 500 cities in India, China, Malaysia, United Kingdom, Nepal, United Arab Emirates and Indonesia.

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