Oyo to Increase Number of Premium Hotels in India by Double in 2023
- ByStartupStory | February 22, 2023
Oyo, the hospitality chain, has unveiled its intention to expand the number of high-end hotels in India by two-fold in 2023 to cater to the upsurge in corporate travel. The company aims to increase its presence across key business destinations to support this initiative.
Oyo, the hospitality chain, has a portfolio of premium hotel brands including Townhouse Oak, Oyo Townhouse, Collection O, and Capital O. The company is set to bolster its premium hotel offerings by adding around 1800 new properties in 2023, building on its strategy which began in Q4 of 2022 when it added over 400 premium hotels to its network between October and December.
According to Oyo founder Ritesh Agarwal, the hospitality chain currently represents a mere 4-5% of India’s unbranded accommodation market. Agarwal believes that all hotels, regardless of brand, should provide guests with an exceptional experience by upgrading their facilities, including their rooms, washrooms, and check-in processes.
Oyo founder Ritesh Agarwal stated that the company’s primary focus is on enhancing the quality of its core business in existing markets rather than pursuing new business ventures or expanding into new geographies. The company aims to deliver exceptional services to its customers and may consider premiumizing further. Oyo’s Oyo Townhouse segment has been successful, and according to Agarwal, customers are increasingly looking to upgrade from the Rs 1000-2000 price segment to the Rs 2000-2500 price segment. Therefore, the company is working to expand its Townhouse offerings to meet this demand.
The company has announced that hotel proprietors will reap the rewards of meticulously selected services, including increased visibility for their establishments to potential guests, thanks to Oyo’s extensive network of over 15,000 corporate accounts and 10,000+ travel agents throughout India. Additionally, they will enjoy flexible payment options.
According to a report from ICRA, the hotel room supply pipeline in India is projected to increase at a 5-year compounded annual growth rate (CAGR) of 3.5-4%, resulting in the addition of roughly 15,000 rooms to the existing premium inventory of around 94,000 rooms across the country by the end of the financial year 2023.
The surge in air travel is driving a greater need for luxury hotels in India. The Directorate General of Civil Aviation (DGCA) reported that domestic air traffic in India escalated by 95.72% year-on-year (YoY) to 125.42 lakh passengers in January 2023, up from 64.08 lakh passengers during the same period last year.
In response to this trend, hotels are providing supplementary services and facilities to improve the travel experience and simplify things for their guests. “As a result,” the spokesperson stated, “our expansion strategy, which concentrates on expanding our premium hotel portfolio, is in line with this development.”
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