Entering into four-star hospitality segment, OYO Hotels and Homes has reportedly acquired ITC Hotels-managed Fortune Select Metropolitan Jaipur for INR 35-40 Cr from UAE-based property developer group Emaar Properties.
Emaar has been refraining from giving any media statements until the acquisition is complete. The company spokesperson told Inc42, “As and when anything fructifies, an official announcement will be made.”
SoftBank-backed OYO had been looking for four-star property in key metro locations and Tier 1 cities in India. According to media speculations, the company plans to set up a base in the hotel industry with a target of 5K rooms through acquiring, leasing or managing.
Why Did OYO Choose ITC-Fortune?
The four-star Fortune Select Metropolitan Jaipur is part of ITC’s Fortune chain. Set up in 1995, the Fortune chain has over 40 hotels in more than 30 cities. The ITC’s branch has several categories of properties such as the Fortune Select, Fortune Park, Fortune Inn and Fortune Resort.
Fortune Select is a chain of four and five-star properties mainly in key business locations and holiday destination, while Fortune Park and Fortune Inn are a mid-scale business hotel range in the three to four-star category. Fortune Resort, on the other hand, is located in popular holiday destinations in the mid-market and upscale segment.
The hotel chain caters to customers looking for business and leisure. In addition, the brand is known to have a strong foothold and a brand recall value.
Does OYO Really Need Another Venture?
OYO was launched in 2013, by Ritesh Agarwal, as a hotel aggregator, since then it has expanded to a franchise model. The company had raised close to $1.7 Bn in funding with a valuation of $5 Mn. The unicorn is also in talks to raise another $1Bn, almost doubling its valuation to $10 Bn.
The budget lodging company offers its services ranging from hotels, holiday homes, Casino Hotels and Coworking spaces in 800 cities across 74 countries. Currently, the SoftBank-backed company was also in talks with Lovely Professional University (LPU) to acquire their student accommodations.
With this ITC-Fortune Deal, OYO will be expanding its services even more to build a chain of four-star hotels.
Inc42 has reached out to both OYO and ITC for comments. The copy will be updated as and when they reply.
Update: September 12, 2019 11:48 AM
The article has been updated to reflect the Emaar Properties’ statement on the issue.