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OYO hotel market out of Asia into Britain for the first time

Date: 2018-09-21

OYO the surprise move constitutes a great threat to the Whitbread's Premier Inn, because in the past few years, Premier Inn has always been the dominant force in the UK hotel market.

OYO is India's rapid development of the hybrid OTA hotel companies, it is expanding the market, and plans for the next 18 months in the UK 10 cities to open the hotel property.

According to Reuters, OYO will use the franchise and the marketing strategy, is expected to sign 300 independent hotels.

The expansion plan is the first time that OYO in the center of the southeast Asia region (in India, China, Malaysia and Nepal) business outside the expansion of the business.

OYO in London in the UK will be the first to open four hotel property, its in Manchester, Birmingham, Glasgow and Edinburgh have opened the hotel plan.By 2020, OYO planned to use the initial investment of $53 million (40 million pounds) employs 100 people, providing more than 5000 rooms.

OYO consolidator early is a guest room, but it soon became a hotel operator with the traditional light assets of similar enterprises.Its claim to be the world's largest digital hotel chain, and to be slightly different with the traditional hotel chain business model.

Founder and CEO of OYO Ritesh Agarwal said: "in recent years, the UK has been one of the most popular international tourist destination, and last year's global visitors number more than 19 million people.The vigorous development of the international and domestic tourism situation and economic industry to promote, in the UK for OYO offers opportunities for the development of billions of dollars.We are happy to be able to offer guests around Britain OYO economy, accessibility and quality of life experience and through technical and operational expertise to provide support to the monomer hoteliers, helping them to focus on customer experience, thus creating more sustainable income."

Threat to Premier Inn

Whitbread's Premier Inn is the main operators, the economy hotel market so OYO move to have certain threat.Private equity-backed hotel group, as well as the solid foundation of large hotel chains such as intercontinental hotels group, will surely pay close attention to the expansion of business process.

Bernstein, a senior analyst Richard Clarke said in report offers investors "OYO brand aimed at economic hotel market, aims to open 300 budget hotel, which would make it become the third largest economy hotel brand, to become the Premier Inn new competitors.It is important to note that for the Whitbread, management, the description of the structural opportunities in Britain, is to win the share of independent hotels, and OYO will provide another choice for independent hotels."

What is OYO mode?

Clarke said OYO is a "hybrid OTA/brand network".OYO runs a called "OYO Rooms" online market, although the market is the hotel in the independent hotels, but OYO design will provide standard services, and have their own loyalty programs.

Since then, the company has entered the field of franchising, some hotels will have the right to property management OYO brand.

So far, OYO from softbank corp and hanting hotel chain group of investors so as to obtain funds at $446 million.