Sometimes it's obvious when a company is growing too fast. This doesn't appear to be one of those times. Oyo wants to be everywhere customers want to vacation.
Oyo Hotels & Homes, the young and rapidly expanding India-based hotel startup, has announced plans to invest $300 million into increasing the company’s footprint in its “newest home market” of the U.S.
The growth will be driven by two of the company’s budget hotel brands, Oyo Hotels and Oyo Townhouse, it said. The expansion will focus on Oyo’s under-penetrated markets such as New York, Los Angeles, and San Francisco.
Oyo currently offers more than 50 hotels in 35 cities across the U.S., including Atlanta, Miami, and Dallas, where it recently opened a U.S. headquarters in February.
“We are in the largest country in the world when it comes to the hospitality industry and there is a definite need here for chic and comfortable hospitality experiences at prices never thought of before,” said Abhinav Sinha, chief operating officer of Oyo Hotels & Homes, in a statement.
Oyo has racked up the venture capital dollars since its founding back in 2013, totaling $1.7 billion, according to Crunchbase. In September the hotel chain raised $1 billion from top investors SoftBank Vision Fund and Sequoia Capital, among others, to help fund expansion into China.
Speaking onstage at the inaugural Skift Forum Asia last month, CEO Ritesh Agarwal announced a new strategic partnership in China with Ctrip aimed at elevating the budget hotel’s business in the country where it holds more rooms but sees lower margins compared to its homeland.
Referencing the agreement Agarwal said, “Ctrip gets access to our quality inventory in tier two to tier five markets in China. Additionally, China is the world’s fastest-growing outbound travel market, so we expect more traffic for India, UK, Southeast Asia, and other markets where Oyo is present.”
The chain earlier this year doubled down on its expansion plans in Asia by committing $200 million towards eclipsing 25,000 hotels in the region.
Agarwal believes his company will be the largest hotel chain in the world by 2023, already sporting 23,000 hotels and 46,000 vacation homes in 74 countries to date. The company’s “global stayed room nights,” or yearly customers, skyrocketed from 6 million guests in 2016 to 75 million guests at the end of last year.
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Photo credit: Oyo Townhouse is one of two brands that will lead new growth in the U.S. for the India-based startup. Oyo Hotels & Homes