BUSINESS CENTRE
HA PERSPECTIVE
selling part of their shareholding. Prior to this,
Maninder Gulati, OYO chief strategy officer,
OYO had raised over USD1bn in its last financing
said: “With Europe spearheading the vacation
By Katherine Doggrell: OYO is the only game in
round, announced in September 2018, led by
and urban home rental trend globally, @Leisure
town in its domestic market. There had been some
SoftBank through SoftBank Vision Fund, with
Group is uniquely positioned to capitalise on its
rumours earlier this year linking Accor to a bid on
participation from existing investors Lightspeed
experience and insights aided with OYO’s full-
rival Treebo, but this hack understands that deal is
Venture Partners, Sequoia and Greenoaks
stack approach towards building the world’s
no longer on the cards, despite Accor’s deal-per-
Capital and supported by new strategic partners
largest global vacation rentals business. If one
week average sliding at the moment.
including Airbnb.
were to look at Europe alone, there is an ever-
Such dominance is bound to make local hotels
increasing demand for vacation homes with an
peeved and we await developments in India with
increasing trend of booking an entire home.”
interest. Now we watch to see whether the group
This year, the company has reported a 3.8 times year-on-year growth in revenue in August 2019, with 1.2 million rooms under management across hotels and homes. Ritesh Agarwal, founder and CEO, OYO Hotels & Homes, said: “The continued support
The funding came as hoteliers in India alleged
can repeat its success in more developed areas.
that OYO was unfairly raising commission fees.
Indian Americans make up a significant number
Additional charges could take deductions to
of hotel owners in the US, which may give the
more than half of revenues, reported Reuters.
company something of an advantage in a country
of our investors like Softbank Vision Fund,
Last month, hotel operators in Bengaluru
Lightspeed, Sequoia Capital is a testament to
called for a criminal probe into the company.
the love, trust and relentless support of our
Two hoteliers in Karnataka filed separate
In Europe, the group has its eye on holiday rentals,
asset owners and customers, hard work of all
police complaints accusing OYO of deceitfully
which offer a certain amount of low-hanging
OYOpreneurs, and our commitment to making
increasing commissions, and accused Agarwal
fruit in a territory where companies such as the
#LivingTheGoodLife a reality for over 3.2 billion
of fraud. OYO, which charges a base franchise fee
aforementioned Accor are big players in the budget
middle-income people around the world. With
of around 20%, insisted it has been transparent
and economy sectors. The recent issues around
the CCI approval now in place, the company will
with its charging structure.
WeWork mean that Softbank, which invests in both
that is already au fait with advantageously-priced franchises.
get a capital infusion of approximately USD1.5bn
At Selina, local press suggested that the
companies, is likely to be pressing for someone to
to support this mission, supported by me and
company could be on the verge of raising
make a profit sooner rather than later. Better keep
other shareholders.
additional money after the funding round
that pipeline rolling.
“Not only are we operating profitably at the
earlier this year, bringing the company’s total
building level but at the same time our Ebitda
funding to USD225m to date. The company has
has also improved by 50% (on a year-on-year
46 locations in 13 countries, with over 22,000
Third parties give comfort
basis). The losses as a percentage of NRV have
beds open or under conversion, combining
Third-party management companies were
also been on a steady and significant declining
private and shared accommodation with co-
providing a source of comfort for investors to
curve. The growth across verticals in India and
working facilities.
rival the brands, delegates at this year’s Annual
globally has been phenomenal and we truly
Selina co-founder & CEO, Rafael Museri, said:
believe that we will be able to build a truly global
“We’ll continue to invest in our technology
As the sector moved away from the periphery
brand out of India, while ensuring that the
innovation team in Tel Aviv as we explore
of real estate investments and towards the core,
business is run efficiently and with a clear path
digitally-driven ways to disrupt the hospitality
there were increasing demands placed on the
to profitability. Our immediate goal however
industry, enhance the complete booking and
brands to justify their roles.
is to make forward looking investments so we
user experience for travellers, and continue
Jens Blomdahl, KSL Capital Partners,
can achieve our mission, while delivering on
rapid expansion into new markets across the
said: “The brand pendulum swings back and
our fiduciary responsibility to our investors by
globe.
forth. With the movement of the third-party
Hotel Conference in Manchester heard.
“As we’ve seen across a number of industries
managers coming into Europe there is some
The company has been strengthening
from co-working to ridesharing, millennials
comfort to be had from them, they create
its position in holiday rentals in Europe,
and Gen Z are redefining how they want to live,
operational efficiency. When you’re on a seven-
announcing in August that it was to invest
work and explore the world. The ambitious and
year cycle of ownership and you have a 25-year
EUR300m growing its European vacation rental
adventurous nature of these generations prove
agreement wth a brand, it’s better to have a
business. The group bought Dutch holiday
that there is a demand for our experiential
third-party operator instead, because you can
rental company @Leisure in May, renaming it
hospitality model today and for years to come.”
sell unencumbered.”
building a sustainable business.”
it Oyo Vacation Homes.
Speaking for the lenders, Emma Young, Allied
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