After China, Hotel Chain OYO Expands Operations To The UK

OYO founder Ritesh Agarwal has taken another major step — after China, Malaysia, and Nepal, Agarwal has now expanded OYO’s presence to the United Kingdom.

In the next 15 – 18 months, OYO plans to offer over 5000 rooms. OYO has already started its operations in four properties in London that offer more than 80 rooms.

The UK business will be led by British entrepreneur Jeremy Sanders, who co-founded the British restaurant chain, Coco di Mama.

“I am very excited to be leading OYO’s expansion into the UK, one of the most dynamic hospitality markets in the world.  We want to become the trusted partner of independent hotels across the UK and, as we’ve experienced in Asia, we are confident that our bespoke technology and operational expertise brings real value to hotel owners and customers alike,” said Sanders.

With an entry in the UK market, OYO will offer guests the Townhouse experience and properties will be operated under models of manchise, lease with full – inventory control similar to other markets like India and China.

The company further plans to invest $46.71 Mn (INR 338 Cr) in the country and will look to launch in 10 cities over the next 18 months including Manchester, Birmingham, Glasgow, and Edinburgh in the United Kingdom by 2020.

“The UK has been the topmost international travel destination for several years and last year hosted over 19 Mn tourists from around the world. Driven by its booming domestic and international travel and budget hospitality needs, the UK presents a multi-billion dollar opportunity for OYO,’ said Agarwal.

Over the next year, the company aims to build out the team by hiring an additional 100 OYOpreneurs (employees empowered to function like entrepreneurs) across the country.

Here’re some quick updates about OYO in India and abroad:

• The company had recently started its operations in China for eight hotels, with a total room count of about 400
• The company transformed over 5,000 exclusive hotels in its chain through multiple formats including franchise, manchise–a hybrid between the management contract and a franchise and leased
• The company ventured into the international market in January 2016 with a foray into the Malaysian market.
• In May 2017, it ventured into Nepal as well and it was also being speculated that OYO will begin its operations in Dubai
• The company claimed that its current GBV run rate has touched the $400 Mn mark
• The company recently acquired Chennai-based service apartment operator Novascotia Boutique Homes

OYO & Ola: Why Are They Looking At Foreign Shores

In recent times, we have seen consumer Internet players such as OYO and Ola aggressively expanding in countries abroad. Does this mean that the Indian market has not been able to offer enough opportunities to these local companies?

The answer is no. For long, the Indian market has been termed as “price sensitive”, where new-age tech startups have had no choice to bank on freemium models to increase their consumer base. However, with rising disposable incomes, lack of time, and easy access to technology, the average Indian is now ready to pay for these services. And this is a boon for consumer Internet companies in India.

The entry of the likes of Ola and OYO into international markets such as China, London, and New Zealand can simply be seen as an attempt to leverage their existing infrastructure to conquer new markets and tap new sources of revenue. It could also be an attempt to finally come out of the shadow of being known for re-modelling Chinese or Silicon Valley business models in India!