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Hospitality major OYO has announced its plans to invest £50 million (approximately Rs 536.95 crore) in the UK over the next three years, primarily to focus on expanding its premium hotel portfolio.
OYO is shifting its UK strategy towards premiumization by acquiring high-end inventory and securing long-term leases and management contracts. It is in advanced talks with major hotel chains and real estate firms for asset management deals.
As per the press release, this current investment in the UK is expected to support 1,000 direct and indirect jobs over the next three years and attract more international travelers, contributing significantly to the local hospitality sector.
The development has come a month after the close of its Rs 650 crore (approximately $65 million) from Redsprig Innovation Partners, an affiliated entity of the company’s founder. Ritesh Agarwal also led the $175 million round through his Singapore-based fund, Patient Capital in August last year.
“OYO entered the UK in 2018, growing to 200+ properties across 65 cities. While serving the budget segment, it now focuses on premium expansion through leasehold and management contracts. The company also plans to introduce popular European brands to the UK market,” said Punit Yadav, country head of the UK.
OYO recently announced its plans to open over 40 premium self-operated hotels in the current financial year, and has already onboarded 18 hotels and plans to add 22 more across key cities including London, Birmingham, Manchester, Liverpool, Glasgow, Bristol, Cardiff, and Edinburgh. Last year, OYO's parent company also marked its entry into the UK's premium segment with the launch of SUNDAY Lansbury Heritage in Canary Wharf.
In FY24, IPO-bound Oyo reported flat revenue of Rs 5,389 crore, slightly down from Rs 5,464 crore in FY23. However, despite stagnant growth, the company reduced its overall expenditure by 16%, leading to a net profit after tax (PAT) of Rs 230 crore in FY24, marking a turnaround in its financial performance.