OYO, a hotel aggregator on the verge of going public, intends to increase its market share in the US by over 100 hotels in CY2023, in response to increased demand in the area.
The COVID-19 pandemic hindered OYO Rooms’ growth in the US market in CY2020 and CY2021, but Ritesh Agarwal, the company’s founder and CEO, tweeted on Friday that CY2022 was actually its “best year,” with a 23% increase in the number of new hotels added to its portfolio when compared to the prior years. “The hotel sector in the US suffers from a severe lack of confidence, and as a relatively new operator, we faced a number of difficulties… Over 35% of our new hotels were recommended or referred by our current hotel owners, according to Agarwal’s tweet. “Our teams doubled down on solutions and products for hotel owners,” he continued.
He continued by pointing out that the US accounted for one of the biggest proportions of global tourism spending, at close to 15%, in terms of scope and size for the tourism and hospitality sectors. OYO plans to add over 100 hotels across the states of Oregon, Washington, Texas, Oklahoma, Georgia, and Florida to meet this expanding demand. A record-breaking 130 million domestic and foreign tourists visited Florida in 2022 alone. Over 50% of Americans live in that country. In most places, our revenues per room are 3X higher than those of the industry, and roughly 41% of reservations are made directly through our app or website, according to Agarwal.
OYO recently rekindled its prospective IPO prospects, and now the company is planning to expand into the US. It had just resubmitted its draught red herring prospectus (DRHP) via the secret pre-filing process to the Securities and Exchange Board of India (Sebi). OYO previously submitted an updated financial report for the first half of the 2022–2023 fiscal year to Sebi in November 2022. This report demonstrated appreciable advancements in the company’s performance since its initial IPO application in September 2021. The latest report demonstrated a recovery in topline, a consistent rise in gross margins, and a general decline in losses.
In H1FY23, OYO recorded its first positive adjusted Ebitda of Rs 63 crore, a 24% increase in revenue over the prior year, and a 69% rise in monthly booking value (GBV per month) for its hotels. OYO had submitted preliminary paperwork to Sebi in September 2021 for an initial public offering (IPO) of Rs. 8,430 crore, which would have included an offer for sale of Rs. 1,430 crore and a fresh issue of equity shares worth up to Rs. 7,000 crore. The business recently revealed its plans to develop 1,800 additional high-end hotels, doubling the number of such establishments in India by 2023.
OYO began concentrating on luxury accommodations in the fourth quarter of 2022, when it introduced more than 400 new luxury accommodations between October and December.
For first-generation hoteliers with more than five functioning hotels on its platform, the business also introduced an accelerator programme.
