OYO: A Revolutionary Change in the Hotel Industry
Introduction to OYO
OYO is new tech and of which was created as a new twist to hospitality industry. It started in 2012 and it’s one of the largest hotel chains in the world today. The primary reason for being is to enable OYO to enable small and mid-sized hotels and homestays on a branded and technologically enabled platform.
Some consider OYO’s business model a high performer in the hospitality industry. On their platform, OYO claims it has more than 157,344 storefronts and has presence in over 35 countries. With reforms and digital tools of OYO, these small hotels have increased their income as well as given better experience to the customers.
OYO’s IPO: A big step for the future
The company, however, applied for its IPO in 2024, before pulling the application off for the second time in May 2024. The main cause of this was the inter alia significant changes in the financial statement of the company due to the refinance scheme. To increase its financial position, OYO will issue bonds worth $350 million to $450 million. OYO’s financials
The net profit
In FY 2023-24, OYO registered a net profit of ₹229 crore. OYO achieved something historic as it posted its first-ever net profit. Until now the OYO had been a loss-making company for a long time before this year in which case the company had the best financial performance.
Adjusted EBITDA
In 2023, the company’s adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) was ₹277 crore and ₹877 crore in 2024. In simple words, OYO has become an efficient operator, which has ensured its EBITDA grew by 215%.
Acquisition
In September 2024, OYO bought G6 Hospitality. In this acquisition, the OYO acquired a total of US $525 million dollars for Motel 6 and Studio 6 brands. This move is a precursor for OYO’s global expansion model whereby it has a chance to establish a brand in new markets.
Investment
OYO had received investment of ₹100 crore from Nuvama Wealth and Investment Limited in the December 2024. The investment was for ₹53 per share, or around $4.6 bn.
OYO’s business model: a step in a new direction
The business model worked so favorably for the hoteliers as well as the travelling customers. OYO has created a platform on the supply side (hotels, lessee and operator) as well as on the demand side (travelers and guests), and utilizes a digital platform for deployment. OYO helps hotels to make the services branded and digitally enabled to earn more revenue. Besides this, it allows customers to get high-quality, affordable hotels on the OYO platform.
OYO had announced the availability of 157,344 storefronts by 2021, and its network is the largest in India and South-East Asia (SEA), while it is second in Europe. OYO’s mobile app, which was downloaded more than 100 million times as of 2021, has today become the world’s third most downloaded travel app.
The future of OYO: what are the expectations?
OYO’s future looks very bright. The company has made many plans to further strengthen its digital technologies, expand into new markets, and attract more customers. The company plans to further scale up global expansion by the end of 2024 and focus on providing more services for hotel owners.
OYO IPO: An opportunity for investors?
OYO’s IPO may be important, but investors should carefully check financial statements and business model of the company. Recent improvement of financial performance by OYO could be a benefit for future investment. This will definitely have to be evaluated along with the risks and chances before you invest.
Conclusion
OYO has established itself in the hospitality industry and has grown so widely popular and global reaching that it can be a big player in the market. However, OYO has not yet announced the exact date of it’s IPO, but the documents will be refiled after it’s refinancing process. However, OYO’s financial performance has also improved recently, providing a chance for investors to capitalise on this small opportunity, but it requires taking a look at the risks first.