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Budget hotel chain OYO is betting big on its Townhouse brand, which is expected to contribute 15-20 per cent of its revenues two years from now.
Launched earlier this year, OYO Townhouse covers the company’s managed and self-operated properties.
According to Abhinav Sinha, COO of OYO, the Townhouse brand, which currently targets millennials — especially business travellers — will later be extended to leisure locations, too. A call on firming up the locations will likely be taken in the second half of 2018.
At present, OYO Townhouse is present in Delhi-NCR, Bengaluru, Hyderabad, Kolkata and Mumbai, with 25 properties and 600 rooms.
New cities where the company will introduce the brand include Chennai, Ahmedabad and Pune. Another 20 properties — that include about 500 keys — will be added to its portfolio by January. Upcoming properties will be spread across both new and existing cities. For example, some10 properties are expected to come up in Kolkata by the middle of 2018.
“Two years down the line Townhouse is expected to contribute to 15-20 per cent of our revenues. The remaining 80-odd per cent will be from OYO Rooms,” Sinha told BusinessLine .
Townhouse properties are said to break even within a month of operations. OYO mostly follows a revenue sharing model for these properties, generally leased from partners. Approximately ₹2-4 lakh is spent on each room.
Booking valueFor OYO, April-June 2017 were the highest grossing months, and the gross booking value stood around $100 million. Sinha, however, did not give an outlook on the projected revenues for the full year.
Incidentally, the company’s blog says OYO Rooms saw its losses widen to ₹496 crore in FY16. This is almost 25 times more than what it posted in the previous year. However, it was reported to have trimmed its loss to ₹325 crore in FY17. The current gross booking value run rate is pegged at $400 million (₹2,600 crore), the blog post says.
The SoftBank-backed hotel room aggregator competes with start-ups like Treebo and FabHotels and other players like MakeMyTrip.
It manages 70,000 rooms with operations in Malaysia and Nepal apart from India. “We are exploring more places outside India too,” Sinha said.
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