Hospitality major OYO has announced plans to invest £50 million (approximately Rs 536.95 crore) in the UK over the next three years, with a strong focus on expanding its premium hotel portfolio. This move signals a strategic shift towards premiumization as the company aims to enhance its offerings in the region.
OYO is steering its UK operations towards premiumization by acquiring high-end properties and securing long-term leases and management contracts. The company is currently in advanced discussions with major hotel chains and real estate firms for asset management deals to bolster its portfolio.
According to the company’s press release, the investment is expected to support 1,000 direct and indirect jobs over the next three years, while also attracting more international travellers. This is anticipated to significantly contribute to the UK’s hospitality sector and economy.
This development follows a Rs 650 crore (approximately $65 million) investment from Redsprig Innovation Partners, an affiliate of OYO’s founder. Additionally, Ritesh Agarwal’s Singapore-based fund, Patient Capital, led a $175 million funding round in August last year, reinforcing OYO’s financial foundation for its expansion plans.
OYO initially entered the UK market in 2018 and has since grown to over 200 properties across 65 cities. While it has traditionally catered to budget travellers, the company is now prioritizing premium expansion through leasehold and management contracts. The company also aims to introduce popular European hospitality brands to the UK market.
As part of its expansion strategy, OYO plans to open over 40 premium self-operated hotels in the current financial year. It has already onboarded 18 hotels and is set to add 22 more across key cities including London, Birmingham, Manchester, Liverpool, Glasgow, Bristol, Cardiff, and Edinburgh. Last year, OYO’s parent company marked its entry into the UK’s premium segment with the launch of SUNDAY Lansbury Heritage in Canary Wharf.
OYO, which is preparing for an IPO, reported flat revenue of Rs 5,389 crore in FY24, 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. This marks a notable financial turnaround, positioning OYO favourably as it strengthens its foothold in the premium hospitality sector.
