Worldwide: Airbnb has confirmed it has invested in OYO Hotels & Homes’ Series E funding, which is reported to be worth between $100 million and $200 million.
The US-based rental platform has not disclosed the amount or terms of the Series E investment publicly, which was announced back in September.
Up to this point, OYO had previously raised $1.7 billion in funding from over 11 rounds, with the most recent being $100 million in February from Didi Chuxing.
Airbnb’s president of homes, Greg Greeley, said: “Emerging markets like India and China are some of Airbnb’s fastest-growing, with our growth increasingly powered by tourism to and from these markets.
“In many of these markets, OYO is empowering local hospitality entrepreneurs to provide more options to more travellers. We share a dedication to offering people more choices when traveling, and we’re excited to partner with Oyo as we work to make Airbnb for everyone,” he added.
Airbnb told Skift it was looking to include OYO accommodations on the platform: “We are exploring the range of ways to work together, including making OYO accommodations available on the Airbnb platform, but we don’t have more to announce today.”
Hotel consulting company Hotelivate founder chairman Manav Thadani said the deal between Airbnb and OYO was an important milestone for Airbnb to make growth steps in Asia.
He said: “Airbnb has not been very successful in both India and China, have in fact lagged behind compared to what they have managed to do outside these two countries. OYO has done tremendously well in a very short time span to capture market share and is a big win for Airbnb to show growth before its proposed impending public market offering.
“Another interesting angle is that OYO is definitely mainstream, and this is where the bulk of the hotel market is for any company looking for growth. Airbnb is currently seen to be playing a role more in the upper segment of the business and has a much higher price point.
“Therefore, in a way, both will be somewhat complementing each other, rather than competing. For Oyo, it is a customer group that currently does not exist,” he added.
Given Airbnb’s expected acquisition of hotel chain HotelTonight, it is another sign that the company is aiming to become a so-called “comprehensive travel marketplace”, which will act as a one-stop portal for a number of different accommodation types.
Airbnb will now look to tighten its growing focus on hotel business in India and China as it reportedly has around five per cent of its business in China and less than one per cent in India. Furthermore, the deal will allow Airbnb to make gains in attracting business travellers to stay in its listed properties, particularly those who prefer to stay in hotels and are willing to spend more when travelling.
The company has sought to expand its property inventory in recent months with the acquisition of French property management startup Luckey Homes, which suggests Airbnb is aiming to focus beyond its traditional tourist and backpacker demographic.
The likely transaction would significantly expand Airbnb’s inventory of 45,000 listings in the country.
Airbnb will also benefit from Oyo’s growing footprint in China. OYO’s China business, OYO Jiudian, operates over 5,000 hotels and 260,000 rooms in 280 cities as of January 2019.
Hotel consultant THRS CEO Yeishan Goel told Skift: “The deal will positively help OYO to increase infrastructure [and] strengthen technology and internal capability. It will also help the company to expand its existing portfolio of budget to mid-segment hotel chain brands.
“Airbnb’s backing could accelerate OYO’s global expansion spree. The deal will be a great advantage for OYO in the U.S. market,” he added.
Meanwhile, OYO Hotels & Homes global chief strategy officer, Maninder Gulati, said: “As the sixth largest hotel chain operator in the world, we at OYO Hotels & Homes are committed to offering our guests and travellers around the world, great quality living spaces. We are happy to have Airbnb as our partner in this vision.
“Strong global strategic relationships that support this mission help drive collaborative efforts in the right direction. Airbnb’s strong global footprints and access to local communities will open up new opportunities for OYO Hotels & Homes to strengthen and grow whilst staying true to our core value proposition.
“We’re excited by the possibilities and committed to bringing benefits to the millions of travellers who now rely on Airbnb and OYO Hotels & Homes to find a home away from home,” he added.