OYO starts US operations with a single property in Texas

Indian budget hotel chain OYO has been expanding internationally for over a year. It had started with Dubai, then had moved on to create the largest inventory in China.

Further, it had also forayed into South Asian and European markets with Indonesia, Malaysia, Nepal, London, Portugal, Spain, Germany and most recently the Philippines. Now, in a bold but unsurprising move, the company has also launched operations in the United States of America.

As per the reports, the Ritesh Agarwal led firm has begun testing its first property in Austin, Texas. An office has also been opened in Dallas.

The company is also looking to hire a human resources director, talent acquisition director, and several sales and managing people in Dallas.

Apart from this, hirings have also been listed in Atlanta, Myrtle Beach, South California, Columbus, Ohio, Miami and other places.

All these hirings are a part of OYO’s plan to add “hundreds of hotels in dozens of states” in the US this year.

It is a common knowledge how OYO aspires to become the world’s largest hotel chain by 2020. It has been rapidly expanding for the same reason. As per The Information article, OYO’s global number of how many rooms were occupied for a night increased from 6 million in 2016 to 75 million in 2018.

At this point, one has to ask if the speed of this expansion is rather, too rapid?

For OYO, it looks like the growth is about increasing inventory. In India, the company had faced an FHRAI notice for converting houses and apartments into OYO hotel to increase inventory at the cost of customer safety.

It has made several top levels hires like Aditya Ghosh, Andrew Verbitsky, Tobias Jork etc. to manage these international and Indian operations.

However, the model that OYO follows to offer its services by franchising hotels while maintaining full control, as well as controlling the back end and front end services itself might have proven to work in India and other developing nations. But in highly developed markets like the UK and especially the US, how much will these models be relevant and successful.