US: Indian hospitality unicorn OYO is attempting to expand its company towards the US vacation rental market.
The group hopes to take on a property management focused role, subleasing out properties on behalf of owners and operators.
OYO, which specialises in managing budget hotels, currently operates around 50 homes in the US market so far. It plans to expand to a wider range of markets in the near future.
Company CEO Ritesh Agarwal said he preferred the vacation rental model, as it would require fewer regulatory hurdles than short-term rentals. Furthermore, by targeting smaller towns, OYO would come under less scrutiny and face lower competition.
He told The Wall Street Journal: “We don’t think of hotels and vacation homes as two different businesses.”
The group is a part of Softbank’s technology Vision Fund, which includes such companies as Airbnb and WeWork. The group has received $3 billion worth of funding from the company so far.
OYO has drawn comparisons to Vision Fund fellow WeWork, with its similar high growth and acquisition focused strategy. The group laid off thousands of workers earlier this year in an attempt to cut down on global costs, primarily in India and China.
The group has also been hit with losses as of recent, posting a $355m loss in Q1 2019.
However, while OYO has been cutting back in traditional hotels, it has been continuing patterns of expansion in short-term rentals, especially in Europe. After acquiring @Leisure Group to enter the market, it purchased TUI Wolters’ vacation rental sector in February.
The group also has been making key executive appointments within the business segment.
With this expansion, OYO may be banking its future going forward on the rental market.
Agarwal added: “There has been a significant amount of feedback among high-growth companies world-wide, basically saying that the market appreciates a trend towards profitability very significantly.”
For more information, visit the OYO Vacation Homes website here.