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Oyo Rooms is Testing Waters in U.S. Market: Report

India’s largest hospitality company Oyo Rooms is gearing up for a big leap of faith as it is busy testing waters in the U.S market, according to sources familiar with the matter. This is obviously part of the ongoing rapid international expansion strategy that has propelled Oyo to some of the most lucrative hospitality markets including China, Nepal, UAE, Indonesia, Malaysia, Philippines, UK and Dubai.

Ritesh Agarwal, Founder & CEO of Oyo Rooms

According to reports, Gurgaon based company will be testing waters in the highly competitive U.S market with Oyo Townhouse, Oyo’s budget hotel services that cater to the needs of millennial travellers. Reports further add that Oyo has already started renovation work in hotels around Texas and Dallas and its U.S workforce currently stands at nearly 30.

If the feedback from Texas and Dallas region is positive, Oyo will add another 2000 rooms in several US cities and states to create a vast network, media reports further claimed after citing unidentified sources.

Oyo’s decision to gamble in the U.S. market is unsurprising given that the U.S. is one of the most lucrative markets for hospitality. Its robust international tourism and strong business commuters make the U.S market immensely rewarding for the hospitality players.

The unicorn company will also try to implement the lesson learned from the U.K market since it is very similar to the U.S. market.

The company, which is currently valued around $5bn, is also eyeing Japanese market and is most likely to debut its services in the Asian country ahead of the 2020 Tokyo Olympic Games.

What is really fuelling Oyo’s rapid international expansion

Oyo no doubt has deep cash coffers to widen its international horizons. The company had raised $1 Bn from SoftBank in September last year, giving enough financial muscles to carry out an aggressive expansion plan. However, the ‘SoftBank’ factor cannot be overlooked in Oyo’s unwavering appetite for international expansion.

SoftBank is known for pushing its portfolio companies to play aggressively. India’s largest digital payment company Paytm has also been pursuing aggressive international expansion evidently at the behest of Softbank, which – apart from Alibaba – is one of the important investors in the company.

Softbank also played an instrumental role in booking the deal between Grab and Uber last year, resulting in latter’s unceremonious exit from the Southeast Asian market.

Therefore, there shouldn’t be any doubt that SoftBank is playing a parental role in Oyo’s ongoing international expansion strategy.

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