Oyo Plans to Add 250 Hotels in U.S. This Year

India-based hotel aggregator and operator Oyo plans to increase its U.S. footprint by adding over 250 hotels in 2024. This would represent a 150% uptick compared to the previous year’s addition of 100 hotels.Speaking at the Skift India Summit last month, Oyo Founder and Group CEO, Ritesh Agarwal, reflected on the company’s growth in U.S., noting that it had a little over 100 hotels, just two and a half years ago.With a current count of 320 properties, this expansion marks a strategic move by the company to bolster its presence in the American market.“The eventual objective is to ensure that every 1 in 10 hotels in the U.S. can proudly associate itself with the Oyo brand,” said Nikhil Heda, head of business development at Oyo U.S.Expansion PlansThe expansion strategy will target both new and existing markets, including Miami, New York City, San Francisco, New Jersey, Las Vegas, Los Angeles, Manchester and Orlando, the company said.However, in response to a query from Skift, Oyo clarified that its latest luxury brand offering, Sunday, is not slated for introduction in the U.S at this time. The expansion would include Oyo hotels. Agarwal had earlier said that being its home market, India gives the company confidence to experiment and try newer things.Since its U.S. debut in 2019, Oyo has steadily expanded its presence across more than 200 visits, with recent visits by Group CEO Agarwal to key locations like Florida, New Jersey, and New York.Oyo will be debuting its properties in San Jose, Boston, Seattle and San Diego this year, it told Skift.Reflecting on the pandemic-induced paradigm shift, Agarwal emphasized Oyo’s evolution from a conventional mid-scale hotel brand to a digital-first enterprise, adding tangible value for its hotel owners.What Oyo discovered was that 70% of its hotels hadn’t previously tapped into online revenue streams. “They saw us as their online person. They said we can get all the online revenue increase if I partner with Oyo,” Agarwal said while speaking at Skift India Summit.Oyo’s focus on digital demand generation and transitioning to a digital-first franchise model has emerged as a key differentiator, fueling its growth, according to Agarwal.Markets with Above Average GrowthGautam Swaroop, CEO of Oyo International, emphasized Oyo’s operational expertise in rapidly scaling its operations while delivering quality experiences for guests and driving financial results for partners.Strong growth indicators in markets like Florida, Nevada, and California further bolster Oyo’s confidence in its expansion endeavors.Oyo said it has witnessed above average growth in markets like Pennsylvania and New Mexico, where per room revenue improved by more than 25% in 2023. States such as Oregon and Washington have seen a jump in “used room nights” by approximately 25%.“We have been consistently adding more than 1000 sellable rooms nights every month,” Heda said.The company recently claimed that it has outpaced the budget hotel industry’s per room revenue (RevPar) growth in 2023. While Oyo’s per room revenue witnessed a 17% growth in 2023, the budget hotel segment in the US’s per room revenue saw a year-on-year decline of 9% in 2023, Oyo cited a STR report as saying.Moreover, partnerships, such as the recent collaboration with payment processing platform Stripe, also highlight Oyo’s commitment to improve customer and owner experiences through seamless payment solutions and real-time payouts to help improve cash flow.Oyo’s International OperationsWith its presence in over 35 countries globally, Oyo also owns a vacations home business in Europe, which operates legacy brands such as DanCenter and Belvilla.India is still the biggest market for Oyo, where it manages or partners over 10,000 hotels.With a potential public offering in the Indian markets, Agarwal last month said the company has no need to raise more money right now. “My view is that, at this point of time, we don’t need access to capital from either the public markets or the private markets,” said Agarwal at the Skift India Summit. “Whenever the board feels that the markets are right for them to consider public offering, we will be ready to go out.”