As Oyo grows in China, new deal will boost brand awareness

Oyo China
Oyo has more than 450,000 guestrooms in 10,000 hotels across China’s 320 cities. Photo credit: Oyo

A mere 18 months after making its debut in China, India's Oyo Hotels & Homes is reportedly the country's second largest hotel chain, with more than 450,000 guestrooms in 10,000 hotels across China’s 320 cities. 

The growth has been rapid: In November 2018, a year after expanding its presence to the country, Oyo had 180,000 franchised and leased rooms and more than 4,000 hotels under under franchise, manchise (a hybrid of franchise and management) and lease agreements across China. By January, it was in 280 cities, operating more than 5,000 hotels with 260,000 rooms. "Today, we are less than 2 percent of the country’s accommodation market that stands at about 35 million rooms," said Sam Shih, COO at Oyo Jiudian, Oyo's Chinese subsidiary, about the latest numbers. "We have an incredible opportunity ahead of us and we are just getting started.” In November, the company expected its pace of Chinese expansion to be 30,000 rooms per month.

OTA Partnership

That growth is expected to continue and a new arrangement is poised to help Oyo raise brand awareness among more Chinese travelers—both domestic and outbound—following a strategic partnership with Ctrip, a Chinese integrated travel services company.

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Ctrip is the largest provider of overseas travel for Chinese travelers, with approximately one in every four booking and searching for travel products and services through Ctrip’s platform, according to the company.

The partnership is expected to help Ctrip leverage Oyo's "volume of low-cost assets," stated the company, while Oyo will benefit from Ctrip’s distribution network and platform ecosystem. 

Neither company disclosed the financial details of the partnership.

Oyo Jiudian's team will work together with Ctrip to explore collaborative ways of helping asset owners across multiple areas, including providing marketing support and greater visibility online, improving and "upskilling" the talent pool, harnessing technology, improving customer traffic to the each hotel's listing and streamlining operations in terms of bookings generated from Ctrip.

Shih said, "As China’s second-largest hotel chain, we are determined to soldier on in our mission of creating quality living spaces, and the exceptional reach that Ctrip enjoys as China’s largest OTA will steer us closer to travelers who can choose from OYO’s 10,000 hotels in the country located across 320 cities."

According to Maninder Gulati, Oyo's global chief strategy officer, Ctrip has more than 300 million registered members. "We are aiming to build a multi-dimensional, full-service value chain covering every aspect of travel," said Gulati. "This partnership between two giants will add value to China’s hospitality landscape by empowering both the demand and supply side. This will also boost existing consumption in the industry, enhance the size of the consumption opportunity in the market and upgrade the consumption patterns of China’s hospitality industry as well."

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. Oyo has, so far, been focusing on China’s tier-2 and below towns and cities. The company claimed that its franchisee renewal rates are at 97 percent, and that owners who signed on for a minimum of three months have seen an average doubling in occupancy.

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