India-based hospitality company OYO Hotels & Homes plans to invest $300 million in the U.S. over the next few years. It said the funds would be used for property growth, headquarters talent, competency building and infrastructure development.
The company has more than 50 hotels in 35 cities across 10 U.S. states, including Dallas, Houston, Miami, Atlanta and Augusta, Ga., and will expand its OYO Hotels and OYO Townhouse brands to New York, Los Angeles, San Francisco and other cities. OYO's current U.S. growth pace is opening one hotel a day, on average.
The company is known for well-designed spaces at affordable prices. OYO Hotels & Homes global COO Abhinav Sinha said of the U.S., "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."
At the NYU International Hospitality Industry Investment Conference this month, STR SVP of global business development and marketing Vail Ross told BTN to keep an eye on OYO. "I'm not an expert on their business model, but they are going in and buying real estate and have complete control over the property and their main revenue strategy is occupancy and not rate," she said. "So they are operating at an affordable rate. It is definitely going to be interesting to see what it does from a revenue management standpoint in certain markets they are in, especially in the midscale economy segments that they will be competing against."
Airbnb invested between $100 million and $200 million in the company in April. Other investors include SoftBank Vision Fund, Greenoaks Capital, Sequoia and Hero Enterprise.