Softbank-backed OYO sees opportunity in mid-market managed properties

SoftBank-backed OYO Rooms says it sees a huge opportunity in managed properties of India’s mid-market hospitality sector, with plans to set up 250 townhouses across the country by December.

Townhouses, managed and run by OYO, are a departure from the company’s asset-light model of standardised rooms run by existing hotel owners. 

In the new model, OYO leases old hotels. It will remodel these with its own specifications and control the entire experience. 

“Townhouse’s neighbourhood connect is a result of understanding that millennials like to switch seamlessly from work to play. They want freedom to choose, change and decide at a moment’s notice, but that flexibility is not extended to quality and consistency of service, which remains non-negotiable,” said Abhinav Sinha, chief operating officer.

At the launch of its first townhouse in Bengaluru, its seventh across India, the company said it planned to open 25 such properties across the city within the next seven months. 

The rooms would be priced between Rs 2,500 and Rs 3,500 but rates would dynamically change based on demand.

After Bengaluru, the company would look to expand its townhouse concept further into Karnataka, including holiday destinations such as Mysuru. 

However, for the first year, the company says it will only target 12 Indian cities which rank high in the business and tourism travel routes. OYO says townhouses are made for millennials, with contemporary styling, high-speed Internet, Netflix subscriptions in each room, community spaces and cafes. It did not, however, disclose the type of investments to grow its managed hotels business, and said the time it took for each property to break even was a closely-guarded company’s secret.

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel