Oyo commits ~INR 1400 crores in India, reiterates focus on customer experience and asset owner success

New Delhi, March 12, 2019: OYO Hotels & Homes - South Asia’s largest, and world’s fastest-growing chain of hotels, homes and quality spaces - today announced a commitment of ~INR 1400 crores ($ 200mn) for the India & South Asia business, as part of its efforts to further double down on its expansion plans, improve customer experience and ensure increase in continued asset owner success. The idea is to further deepen and widen presence across the home country while focusing on aggressive capacity building to bring the choice of a beautiful living space of an OYO hotel to every corner of the country. The company today also announced the addition of Collection O hotels to its existing portfolio of the budget- to mid-segment hotel chain brands while introducing an in-app SOS button that activates on check-in- a first in the hospitality industry. Currently, over 93% of OYO’s sales are from repeat or word-of-mouth customers. With the additional funding, OYO Hotels & Homes furthers its commitment to deliver consistent improvement in customer experience, across its brands.

Referring to the India & South Asia business, Aditya Ghosh, CEO, India & South Asia said, “The focus on growing and deepening presence in India & South Asia is relentless. Key priorities as identified by the business for the year include delivering superior quality of product and service for every OYO brand with a focus on safety and security, winning hearts and minds while expanding our presence deep and wide, a focused fast-paced growth while making partnering with OYO the most attractive entrepreneurial opportunity for asset owners, a greater and deeper engagement among all OYOpreneurs and continuously evolve to become the most-loved hotel brand. Today, with the further investment of INR 1,400 crores and the launch of mid-market brand Collection O hotels, I think we are all set to ensure our customers get the best experience and prices like always - but just a little better than yesterday. ”

PAT & FINANCIALS

Invests ~INR 1400 crores in India business

On the back of a strong movement in fundamentals year-on-year, OYO Hotels & Homes today is poised to take on a larger role both in India & South Asia as well as in its other home markets & globally, as part of the brand’s vision to become the world’s largest hotel chain by 2023.

* The company aims to focus on investing and franchise building to take advantage of the global ~$3.6trn accommodation market opportunity rather than chase short-term goals like profitability;

* Improvement in economics is ongoing, however, with losses as a percentage of realised value (OYO Hotels’ sales run rate) reducing year-on-year from 44.5% in FY 2016-17 to 20.3% in FY 2017-18. In FY 2018-19, OYO estimates further improvement in the economics of close to 50%, with losses going down to 10.4% (Estimates).

* Globally, OYO Hotels & Homes is now present in 10 countries, over 500 cities, and hosts millions of guests from around the world in over 18,000 buildings (hotels & homes) and over 515,000 rooms with OYO Hotels’ sales run-rate at December ended 2018 at $1.8 bn - growing 4.3x yoy.

Ritesh Agarwal, Founder & Group CEO, stated, "With a strong balance sheet, today we can go to more places than ever, introduce new categories, invest in our assets, while maintaining our high-quality standards, without raising any further capital. OYO was started with a simple mission of bringing beautiful living spaces for everyone. Today, as the world’s seventh-largest hotel chain, we are firmly moving towards our goal of bringing these great experiences at unbeatable prices to guests worldwide. India & South Asia is our home market and the management strongly believes that we are firmly on the path of becoming one of the largest consumer brands in the nation. This is backed by OYO being the largest chain by rooms and sales; a leader in occupancy with strong customer and asset owner fundamentals; and backed by an incredible leadership team led by Aditya at the helm. We are committing over INR 1,400 crores for technology investments, renovation, and managing investments for the calendar year, and will provide more, if needed, to help the team ensure continued economically efficient growth.”

GO DEEP AND PLOUGH WIDE

Expands reach and improves accessibility, etches footprints in 81+ cities in India in 2018

OYO Hotels & Homes expands presence in India to over 259+ cities, 8700+ buildings (hotels and homes) and 173,000+ rooms. In 2018 itself, OYO added over 81 cities to its footprints. The idea is to have an OYO anywhere, and for everyone. OYO Hotels’ sales run-rate globally at December ended 2018 was at $1.8 bn - growing at 4.3x - and India was a large part at $1.2 bn, growing at 3x with 50% PAT improvement annually.

CUSTOMER FOCUSED

An OYO for everyone

With greater emphasis on the multi-brand strategy for the budget to mid-scale hotel segment, what started with OYO Rooms in May 2013, has in the last 12 months evolved into a company that has seven other brands - OYO Townhouse, OYO Home, Capital O, Collection O, SilverKey, Palette Resorts, and, more recently, OYO LIFE in the housing rental space. On the back of OYO’s growing popularity in the travel and leisure segment, we also introduced Total Holidays and strengthened our hold on the MICE segment.

* Interesting to note that repeat rates of customers continue to be high with 93% revenue from word of mouth

* Marketing spends as a percentage of realized value are also among the lowest in the industry

* This year, the company aims to further grow its corporate customer base, over 16000+ corporates have already been signed

* With this in mind, OYO recently launched Collection O, an offering that aims to be a mid-scale business hotel that caters to this burgeoning segment

* Consistent improvement in customer experience leading to over 93% sales from repeat or word-of-mouth customers

BEFORE, DURING AND AFTER EVERY BOOKING

Tech for safety

As a full-stack technology-based hospitality company, a tech-first approach has been adopted so that there are multiple ways of ensuring a secure and safe experience for guests, before, during and after every booking.

* As a part of this commitment, an industry-first in-app SoS button has been piloted in over 25 cities in India, which activates on check-in and includes options to contact the police as well as OYO’s 24X7 Safety Response Team (SRT)

* Before every booking, a transparent online booking process with real photos of the property allows guests to verify each building inside out

* During every booking, guests have access to in-person assistance by the OYO Captain, in-app feedback options as well as the wider net of CCTV surveillance in all lobby areas

* After every booking, guests continue to have access to a variety of options to share their feedback, including in-app & social media reviews and ratings for the property as well as staff. OYO also has an industry-leading responsiveness on Facebook and Twitter of 2.5 - 3 mins

WE GROW AS ASSET OWNERS GROW

Asset owner success

Our full-stack technology-led model is helping the business deliver on occupancy improvements month-on-month and sustain the momentum across hotels in India SA and globally;

* In India alone, the jump in occupancy cohorts has enabled an increase in average occupancy from 25% to 65% within three months of a building joining OYO’s chain

* On an average, over 75% of hotel owners associated with OYO Hotels have seen an increase of 20-30% in occupancy, a 2.5 x jump in RevPar and a significant jump in profit, for every asset operating as an OYO branded property

* On average, there are less than 1% asset owners who churn for both regrettable and un-regrettable reasons, making it one of the highest retention rates in the industry

This year, we are introducing several initiatives focused on further strengthening our relationship with the asset owner community.

STRATEGY 2023

Focused on gaining share of mind and heart across India SA and key markets the world over, the company is on track to becoming the world’s largest hotel chain by 2023 and becoming one of the most impactful consumer brands in India and South Asia. This is in line with OYO’s strategy to expand and capture as much of the opportunity in existing markets, while also identifying new markets where it can meet the demand-supply gap to make the most impact. With a healthy balance sheet, OYO Hotels & Homes will focus on capacity building and look at opportunities for both organic and inorganic growth as long as it helps us in the company’s mission. Capacity building is key, as the company aims to allocate resources and support needed to make our collective vision for 2023 a reality.

Commenting on the continued growth in India, Aditya Ghosh, CEO, India & South Asia added, “As we expand our presence in the market, consistency of quality is key. As a customer first company, we are

heavily invested in ensuring customer responsiveness. Over 90+ customer-facing campaigns run month on month in South Asia, and our turnaround time across social media channels is 2.5 minutes. We believe great quality and repeat customers is the only long-term sustainable investment and hence, each of our brands including OYO hotels, Collection O hotels or OYO Townhouse are key in the years to come. ”

Ritesh Agarwal, Founder & Group CEO, further added, “We are staring at a social revolution that manifests itself in terms of how a truly global brand out of India is not just reimagining hotels & reinventing living spaces, but in the process, enabling an entire ecosystem of micro, small and medium entrepreneurs as well as ancillary industries. All while creating hundreds of thousands of jobs opportunities. Having generated over 100,000 jobs in India alone through over 26 OSI’s, we are committed to making sure that the hospitality sector remains a driver of innovation and employment in the country with OYO Hotels and Homes as a key enabler of the same.”

As the India presence expands to over 259+ cities, 8,700+ buildings (hotels and homes) and 173,000+ rooms, an ‘innovating from India for the world’ approach has led to the launch of multiple industry-first tech solutions including the in-app SoS button. With global growth breaching 10 countries and the half a million rooms mark, the company is poised to continue ramping up capabilities.

About OYO:

OYO is South Asia’s largest and the world’s fastest growing chain of hotels, homes & spaces! With footprints in more than 500 cities across 10 countries - India, China, Malaysia, Nepal, the UK, UAE, Indonesia, Saudi Arabia, the Philippines and more recently Japan. With over 18,000 franchised or leased hotels in its chain and over 6000 homes. OYO is backed by leading investors, including the SoftBank Group, Greenoaks Capital, Sequoia India, Lightspeed India, Hero Enterprise and China Lodging Group. For more information, log on to https://www.oyorooms.com/

Global growth crosses half a million rooms mark

* Expands reach and improves accessibility: Expands presence in India to over 259+ cities, 8700+ buildings (hotels and homes) and 173,000+ rooms

* An OYO for everyone With Collection O launch, India hotels brand portfolio alone to grow to 6 including OYORooms, Townhouse, SilverKey, Capital O, Palette Resorts. In the homestay segment, OYO Home has seen a 5X growth in 2018

* Technology for safety: Launches industry-first in-app SoS button for emergency assistance with options to contact the 24x7 OYO Safety response team as well as local law enforcement authorities along with consistent improvement in customer experience leading to over 93% sales from repeat or word-of-mouth customers

* Asset owner success: Launching several initiatives targeted at asset owners, with the objective of making franchising with OYO an attractive entrepreneurial experience and continuing its success of highest-in-industry retention rates