While its operating revenue was INR 416 Cr, its net loss was INR 360 Cr in FY18
OYO has projected revenue of almost INR 1,500 Cr for the current fiscal year
The rise in costs was primarily due to spending on technology and team building, OYO said
Inc42 Daily Brief
Stay Ahead With Daily News & Analysis on India’s Tech & Startup Economy
Gurugram-headquartered hospitality unicorn OYO Hotels and Homes has reported a 3.5x jump in revenue from its India operations for the year ended March 2018. Operating revenue rose to INR 416 Cr (58.1 Mn) in FY 2017-18 compared 120 Cr ($16.7 Mn) in FY 2016-17.
The company also reported a net loss INR 360 Cr ($50.2 Mn) in FY 2017-18.
The SoftBank-backed hospitality chain projected that it would generate a revenue of almost INR 1,400 Cr ($209.5 Mn) for the current fiscal year. “The revenue growth has been driven by strong underlying business drivers, with notable increase in exclusive room supply, two times increase in stayed room nights and consistent margin expansion,” OYO said in a statement.
According to OYO finance head Abhishek Gupta, the rise was primarily due to spends on technology, team building and further investments in newer categories that it entered during the previous financial year.
“To maintain this 3x growth year-on-year, the machine needs to be bigger and invest, ahead of time, in people and technology. We have also invested in new categories, which, while leaders in their respective segments are still nascent businesses,” ET cited Gupta as saying.
Further, OYO maintains to continue its investment in technology and build long term capabilities while getting onboard the top talent in the country. In FY 2018-19, OYO predicted further improvement in the company’s economics of close to 50%, with losses going to down to 10.4%.
OYO, launched by Ritesh Agarwal in 2013, only shared the numbers of its India operations. The company which counts investors including Greenoaks Capital, Sequoia India, Lightspeed India, Hero Enterprise, has already established a strong presence across China, Nepal, UK, UAE, Indonesia, Malaysia, Phillippines and Dubai.
The company currently claims to have over 13K hotels and 3,000 homes listed on its platform. The company also aims to expand its presence across 10 Indian cities by 2020, and add another 1K direct and indirect employment opportunities.
Over the past few months, OYO, along with other online hotel booking companies, are in a face-off with hotel associations across cities over an alleged contract breach, arbitrary revisions of commission rates, stopping minimum guarantee amounts, etc.
In January, the all India body of hotel owners and operators, the Federation of Hotel and Restaurant Associations of India (FHRAI), has said that more than 200 hotels have ended agreements with hospitality chain OYO. Similarly, the hotel associations of Mumbai and Gujarat have also reiterated similar sentiments.
OYO spokesperson told Inc42 that the protests have not hampered the company’s operations and its business is as usual for the hotel room aggregator.
Note: We at Inc42 take our ethics very seriously. More information about it can be found here.