OYO becomes the second-largest hotel group in China, sees over 97% asset owners extend contracts as preferred brand

Beijing/Delhi, 22 May, 2019: OYO Hotels & Homes, the world’s sixth largest and fastest-growing chain of leased and franchised hotels, homes & living spaces, announced that it has now become the second-largest hotel group and company in China. In a short span of 1.5 years, OYO has expanded its presence to 320 cities, nearly 10,000 OYO-branded hotels and 450,000 rooms, surpassing the scale of traditional and established hotel chain brands in the country, such as Home Inn, Hanting and others. The franchisee contract renewal rate of more than 97% has been highly encouraging and reflective of the value that OYO creates for asset owners, while providing quality affordable accommodations to guests.

Commenting on the development, Sam Shih, COO, OYO China said, “OYO Jiudian (Hotels) operates like a Chinese company and delivers better living for middle-income people across the country. We have ensured that for the first time you can get a great living space in less than RMB 150 as well. Everyday, over 200,000 heads are on OYO Jiudian pillows in China due to the great experience at low cost. Also, we have enabled jobs for over 100,000 young people due to the occupancy rise and, as more people stay in our hotels, more economic opportunities are created. I am humbled to see that over 97% of franchisee partners have come back and renewed their contracts, a testament to the impact we have had on their business, both at occupancy and revenue levels. Today, we are less than 2% of the country’s accommodation market that stands at ~35 mn rooms. We have an incredible opportunity ahead of us and we are just getting started.”

OYO has revolutionized the fragmented and legacy-driven budget hospitality space in China by building a brand, optimising costs, hiring talent, as well as leveraging brand channels. With second-tier cities at its core, OYO Hotels’ chain extends deep into China’s tier-2 to tier-6 cities. It has expanded its roots deep in lower tier cities to offer branded living experiences for customers pursuing personalization and quality, while at the same time driving consumption and upgraded tourism related accommodations, similar to Pinduoduo and other tier-2 focussed companies in the middle kingdom.

Asset owners, who have joined the OYO Jiudian (Hotels) group for 3 months or more, have, on average, seen a 2X increase in occupancy (see table below). The company’s continuing focus on creating beautiful living spaces and delivering an elevated guest experience has helped improve occupancy and stay experience at these hotels. For example, several OYO hotels have witnessed significantly improved ratings on portals like Fliggy within 3 months of onboarding. OYO Jiudian (Hotels) continues to create over 100,000 jobs for young people across the country.

Reflecting on his association with OYO, Mr. Wang, owner of an OYO hotel in Chongqing, said, “Three things caught my attention about OYO. First, operational flexibility. Second, the powerful brand, and third is the deployment of trained front office manager and staff. The benefit of being a part of a chain and its accompanying reputation creates the necessary visibility for my hotel among local and international travellers. The staff helps me maintain offline channels and activates my online travel agent platforms. After six months of working with OYO, my revenue has witnessed a steady growth and the biggest chunk, that comes from online channels, has almost doubled.” Mr Wang also expressed his appreciation for OYO’s work, as his hotel’s ranking in Ctrip improved from 5000 to 600 within 6 months.

Echoing this sentiment, Mr. Tong, owner of OYO Premium Boya Hotel in Zhoushan, saw an increase in occupancy within just 2 months of partnering with OYO. He never stops talking positively about OYO and says, “People in Zhoushan believe the first portion of the soup is the most delicious. OYO Hotels acts in our interest and it helped me achieve 30% revenue increase in the first 2 months. I am seizing the opportunity of the future.”

To ensure asset owners have improved visibility on potential customers from around the world, OYO Hotels is also exploring ways to collaborate with online travel agents (OTAs) such as Fliggy, Ctrip and others, along with other consumer traffic-building platforms. The company recently announced a strategic partnership with Alipay and later launched the OYO miniprogram in Alipay. The two companies aim to cooperate in areas like membership, traffic exchange, scenario integration, finance services, smart payment, credit life, and hotel upgrades. Jing Xiandong, CEO of Ant Financial Services, said, “The launch of OYO Hotel miniprogram in Alipay is yet another success. Miniprogram is one of the most important strategies for Alipay for the next three years. With miniMP, Alipay can empower industries and ecosystems better and help store owners realize digital transformation and all-scenario marketing.” As of now, OYO Hotels gets 25% of bookings from OTAs in China.

OYO Premium Longting Shanshui Hotel Xunlong, Guilin

About OYO Hotels and Homes:

OYO is the world’s 6th largest hotel chain operating from Tokyo to Texas and the world’s fastest growing chain of hotels, homes & spaces! With the @Leisure Group joining the chain, OYO today has footprints in more than 800 cities across 24 countries including - UK, US, Japan, China, Malaysia, Nepal, UAE, Indonesia, Saudi Arabia, India and the Philippines. With over 20,000 buildings and 700,000 keys under management, OYO is backed by leading investors, including the SoftBank Vision Fund, Sequoia Capital, Lightspeed Ventures, Hero Enterprise, and China Lodging Group and has a mission to bring better living spaces for the world.