OYO, a leading hospitality technology company, has resumed its self-operated hotel model after a three-year hiatus, aiming to manage around 200 premium hotels across major Indian cities. This strategic move signifies a shift towards a more collaborative and quality-driven hotel management style.
The re-launch of OYO’s self-operated hotels, known as the ‘Managed by OYO‘ category, is a response to the evolving demands in the hospitality industry. By adopting a revenue-sharing model through annual to long-term contracts, OYO is not only expanding its portfolio but also providing a flexible and efficient business model for hotel operators and property owners. The company has initiated operations in 35 hotels and is actively seeking partnerships with real estate developers to identify suitable properties for this initiative.
Under this program, hotels will be tagged as ‘Managed by OYO’ on the company’s App and Website, signaling OYO’s active involvement in their operations. This branding strategy is aimed at assuring guests of the quality and service standards they can expect at these properties. Most of these hotels will be onboarded under OYO’s premium hotel offerings, such as Townhouse, Townhouse Oak, and Collection O, catering to the mid-market segment. The company’s focus is on high-traffic metros, including cities like Delhi, Mumbai, Bangalore, Hyderabad, and Kolkata, among others.
Anuj Tejpal, OYO’s Chief Merchant Officer, emphasized the program’s potential to create a win-win situation for all stakeholders involved – landlords, hotel operators, and travelers. This approach is in line with OYO’s aim to foster economic growth in communities through partnerships, offering hoteliers and property owners the opportunity to participate in this program. The positive responses from top hoteliers have encouraged the company to plan an expansion beyond the initial target of 200 hotels.
The revival of the self-operated hotel model by OYO is particularly significant, given the company’s previous decision to phase out contracts with property owners in 2020 due to profitability concerns. This resurgence indicates a strategic realignment of OYO’s business model, focusing on collaborative and quality-assured hotel management. Moreover, the company, led by Ritesh Agarwal, has resubmitted its Draft Red Herring Prospectus to SEBI, signaling a renewed focus on its Initial Public Offering (IPO) plans after earlier delays.