OYO now plans big play in Indonesia, lines up $100-million investment

Within 3 months of its foray into Indonesia, the company has launched the first phase of expansion in 16 cities and has already witnessed a 5x growth

OYO, India’s largest hotel chain, plans to invest more than $100 million in Indonesia. The firm is eyeing a major takeover of the southeast Asian hospitality market.
 
This would be the third-biggest country the hospitality chain plans to enter after India and China.
 
Within three months of its foray into Indonesia, the Ritesh Agarwal-led company has launched the first phase of expansion in 16 cities, and witnessed a 5x growth.
 
It aims to expand to 100 cities by the end of the year.
 
Launched in October 2018, with a string of over 30 exclusive hotels — franchised and operated — and over 1,000 rooms in three cities in Jakarta, Surabaya and Palembang, the hotel chain already operates in 150 hotels across 16 cities.
 
The company is adding on an average 70 hotels every month.
 
“Each and every aspect of our operations in Indonesia is highly localised. This localisation has helped us to customise our offering from a traveller’s point of view in the country, and what was lacking from his or her experience earlier, when OYO was not around. We intend to invest over $100 million in this high-growth market, and plan to expand our presence to the top 100 cities in Indonesia, including Yogyakarta, Bandung, Surabaya, that we recently entered, as well as breaking into Bali over the next 11 months,” Ritesh Agarwal, founder & group chief executive officer, OYO Hotels and Homes, said.
 
Currently, the SoftBank-backed firm has over 400 employees in the country, and plans to more than double that number by the year end.
 
“OYO has managed to create a uniquely Chinese identity for its local Chinese business. Consequently, we are now present in over 280 cities in China. We also have about 5,000 hotels, and over 260,000 rooms.
 

In September last year, OYO raised a billion dollar from four existing investors led by SoftBank. The latest fundraising estimated OYO’s valuation at $5 billion — a five-fold increase since September 2017, when the last funding round happened. Ever since, the company has been on a rapid expansion mode internationally.
 
The company has already started operations in Malaysia, and would enter Philippines soon. It plans to have a pan-southeast Asia presence by the end of the year, before it starts making a move towards Europe.
 
Over the last one year, the company has made a slew of big ticket hirings, including Aditya Ghosh as India, and South Asia CEO, Andrew Verbitsky as head of Europe, Jeremy Sanders as its UK head, and Tan Ming Luk as the country head for Malaysia.