OYO launches in Indonesia, will invest $100 million and reach 35 cities

Indian hospitality startup OYO has launched in Indonesia, starting with 30 properties operated under lease or franchise agreements in three cities.

The company says it will invest $100 million in Indonesia as it expands it operations to the country’s top 35 cities over the next 15 months.

"We’ve been at the forefront of the small and budget hotels revolution in India, China, Malaysia and Nepal, and have recently forayed into the United Kingdom and the United Arab Emirates,” says Ritesh Agarwal, OYO founder and CEO.

“Building the category grounds‐up, we have employed technology and operational acumen to deliver delight to our customers and unique benefits to partners. Indonesia is one of the top choices for both global and Indian travelers, and with our market learnings and expertise we are ready to tap this opportunity.”

OYO currently has more than 270,000 franchised and leased rooms in more than 350 cities.

OYO operates under a model of “manchise” - a hybrid of a management contract and franchise agreement - and offers full-stack technology to its hotels.

“With our technology and operational expertise, we are enabling hotel owners with the competitive edge and business acumen that will help them drastically improve the customer experience while maintaining efficiencies, high occupancy and yields,” Agarwal says.

OYO is also entering the long-term housing rental sector with the launch of a new brand, OYO Living, in India.

The company says OYO Living is geared toward millennials and young professionals who seek the benefits of shared spaces while enjoying financial independence. The units provide furniture, cleaning, maintenance, security and other services.

For property owners, OYO provides full management, including maintenance and upkeep while ensuring guaranteed rental yields.

OYO Living is launching with more than 35 properties with more than 2,000 beds in four cities and aims to expand to the top 10 metropolitan areas of India with more than 50,000 beds by 2019.

In late September, OYO announced a new $1 billion funding round, led by SoftBank’s Vision Fund, bringing total funding to $1.5 billion since its launch in 2013.