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Oyo Rooms

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Oyo Hotels and Homes Pvt. Ltd.
OYO Rooms
OYO Hotels and Homes
Company typePrivate
IndustryHospitality
Founded2012; 12 years ago (2012)[1]
FounderRitesh Agarwal
HeadquartersGurgaon, Haryana, India[2][3]
Area served
Asia, Europe and Americas
Key people
Ritesh Agarwal (Group CEO)
RevenueDecrease ₹5,388,888,888 crore (US$630 trillion) (FY24)[4]
Decrease ₹8,777,777 crore (US$1.0 trillion) (FY24)[4]
Increase ₹229 crore (US$27 million) (FY24)[4]
Total assetsIncrease ₹8,751 crore (US$1.0 billion) (2021)
Owners
Number of employees
1,330 (2023)[6]
SubsidiariesMotel 6
Websiteoyorooms.com

OYO Rooms (stylised as OYO), also known as OYO Hotels & Homes, is an Indian multinational hospitality chain of leased and franchised hotels, homes, and living spaces.[7][8][9] Founded in 2012 by Ritesh Agarwal, OYO initially consisted mainly of budget hotels.[1] As of January 2020, it has more than 43,000 properties and 1 million rooms across 800 cities in 80 countries.[10]

History

[edit]
OYO hotel in Johor, Malaysia
In 2019, OYO acquired Hooters Casino Hotel near the Las Vegas Strip

In 2012, Ritesh Agarwal launched Oravel Stays as a budget accommodation listing and booking website, later renamed to OYO in 2013.[11] Shortly after launching Oravel Stays, Ritesh Agarwal received a grant of $100,000 as part of the Thiel Fellowship, a two-year program from PayPal co-founder Peter Thiel.[12][13]

In March 2016, OYO acquired the team of Qlik Pass, founded by Rahul Gupta and Rishi Swami, to set up and lead its data science department.[14]

In March 2018, OYO acquired Chennai-based service apartment operator, Novascotia Boutique Homes,[15][16] to establish its presence in the service apartment and corporate executive stay segment. It acquired Weddingz.in, a Mumbai-based online marketplace for wedding venues and vendors.[17]

In 2019, OYO and Airbnb announced a strategic partnership where OYO would list their properties in the Airbnb platform.[18] In March 2019, OYO announced a ₹1,400 crore investment in its India and South Asia businesses.[19] In April 2019, OYO announced a strategic global distribution partnership with Hotelbeds.[20] The company also announced two joint-ventures with SoftBank and Yahoo! Japan in 2019.[21] In May 2019, OYO announced the acquisition of Amsterdam-based @Leisure Group, a European vacation rental company, for $415 million.[22] In July 2019, OYO announced the acquisition of Innov8, a co-working space in New Delhi.[23]

In August 2019, Oyo made its first major investment in the United States by purchasing the Hooters Casino Hotel, near the Las Vegas Strip, in partnership with US-based real estate company Highgate, for $135 million.[24][25] In September 2019, Oyo announced the acquisition of the Copenhagen-based data science firm Danamica for $10 million.[26]

In June 2021, Oyo Rooms collaborated with Yatra, Airbnb, and EaseMyTrip to form the Confederation of Hospitality, Technology and Tourism Industry (CHATT), an industry body for the tourism sector of India.[27]

In October 2021, OYO appointed Paralympian Deepa Malik as an independent director on the company's board of directors.[28] In December 2021, OYO onboarded former State Bank of India (SBI) Chairman Rajnish Kumar as its strategic group advisor.[29]

In May 2022, OYO announced the acquisition of Europe-based company Direct Booker, valuing the latter at around US$5.5 million.[30]

In September 2024, Oyo agreed to buy American budget motel chain Motel 6 and its hotel brand Studio 6 in an all-cash deal worth $525 million from Blackstone Inc.[31]

Operations

[edit]

In 2019, OYO had over 17,000 employees globally,[32][33] of which approximately 8,000 were in India and South Asia. OYO Hotels & Homes leases and franchises assets. The company invests in capex,[34] hires general managers to oversee operations and customer experience.[35] OYO set up 26 training institutes for hospitality enthusiasts across India in 2019.[36]

Funding

[edit]

The company's current and former investors include SoftBank Group, Didi Chuxing, Greenoaks Capital, Sequoia India, Lightspeed India, Hero Enterprise, Airbnb and China Lodging Group.

In September 2018, OYO raised $1 billion, of which the RoC filing for the amount of $100 million raised from Star Virtue Investment Ltd. was made on 13 February 2019.[37][38]

In February 2019, OYO received $100 million funding from the Chinese vehicle-for-hire company, Didi Chuxing.[39] In July 2019, Ritesh Agarwal, through RA Hospitality Holdings in Cayman Islands,[40][41] signed a $2 billion deal to buy back shares from existing investors, Lightspeed Venture Partners and Sequoia India, to increase his stake in the company to 30%.[42] The company was valued at $10 billion with this deal.[43][44] In October 2019, OYO raised Series F funding of $1.5 billion led by SoftBank Group, Lightspeed Venture Partners and Sequoia India.[45]

In July 2021, OYO closed a debt financing round of $660 million from global institutional investors to service existing loans.[46] In July 2021, Microsoft expressed interest to invest in OYO before its IPO[47] and a multi-year strategic deal was signed in September 2021.[48] In October 2021, Oyo filed its draft red herring prospectus with the Securities and Exchange Board of India (SEBI) to raise US$1.2 billion through an initial public offering.[49]

In January 2022, more than 500 current and former employees of OYO, purchased around 3 crore shares in the company. The total value of these shares can be approximated to about ₹330 crore (US$39 million), as per the last valuation of OYO of $9.6 billion.[50]

In June 2024, Oyo held another round of funding, raising between $100 and $125 million. The company was valued at $2.5 billion, down over 70% from the previous valuation in 2019.[51]

Financials

[edit]
Year Revenue (In crores) Profits/Loss (In crores) Source
FY 2019 Increase 6,329 Decrease -2,364 [52]
FY 2020 Increase 13,168 Decrease -13,122
FY 2021 Decrease 3,961 Positive decrease -3,943
FY 2022 Increase 4,781 Positive decrease -1,940 [53]
FY 2023 Increase 5,464 Positive decrease -1,287 [54]
FY 2024 Decrease 5,388 Increase 229 [55]

Services

[edit]

Oyo Rooms operates the following brands for its properties and services:

  • OYO Townhouse – midscale hospitality[56]
  • OYO Home – home management system that offers private homes in different locations and are fully managed by OYO.[57][58]
  • OYO Vacation Homes – vacation home brand with vacation rental management brands Belvilla,[59] Danland,[22] and DanCenter,[60] along with Germany-based Traum-Ferienwohnungen
  • SilverKey – hotel brand focused on corporate travellers[61][62]
  • Capital O – hotel booking for business travellers[63]
  • Palette – upscale leisure resorts[64][65]
  • Collection O – booking and renting services to business travellers[66][67]
  • OYO LIFE – long-term rentals[68][69]

Criticism

[edit]
  • In November 2015, Oyo signed a term sheet to acquire Zostel's Zo Rooms in an all-stock deal which would give Zostel's founders and investors a combined 7% stake in Oyo.[70] In February 2016, Oyo's biggest stakeholder SoftBank announced in its earnings report that the acquisition was completed.[71] However, in October 2017, Oyo stated that the deal was called-off and the "non-binding term sheet" for the deal had expired in September 2016.[72] Zostel claimed that the term sheet was binding and it had transferred its business to Oyo which in turn failed to transfer the 7% stake.[73] In 2018, Zostel approached the Supreme Court of India, which appointed former Chief Justice of India, A. M. Ahmadi as the sole arbitrator to resolve the dispute.[74] In March 2021, Ahmadi ruled that the term sheet was binding and Zostel was entitled to execute the definitive agreements in the contract.[75] In October 2021, Zostel wrote to the Securities and Exchange Board of India, seeking a stay on Oyo's IPO and claiming that Oyo's "capital structure is not final."[76] In February 2022, the Delhi High Court rejected Zostel's appeal for a 7% stake in Oyo.[77]
  • In 2018, OYO has been accused of using predatory pricing and not following its own agreements including threatening hotels to unilaterally change some of the clauses or not be paid.[78]
  • In 2018, the company sent mass unsolicited job offer emails targeting senior- and mid-level employees of competitors.[79]
  • In 2019, OYO planned to implement a digital register mechanism which will allow it to share customer data in real-time with the government. This was described as a threat to privacy.[80][81]

See also

[edit]

References

[edit]
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