OYO losses widen to $335 million in FY19

OYO Hotels & Homes, a six-year-old lodging start-up, has posted losses of $335 million during FY19, from $53 million a year ago. It, however, reported a four-fold increase in revenue to $951 million for the same period.

The inherent costs of establishing new markets, including those related to talent, market-entry and operational expenses, among others, resulted in an increase in OYO’s net loss percentage in the near term, which grew from 25 per cent in FY18 to 35 per cent of revenue in FY19, at $335 million. At the same time, in mature markets like India, the company reduced its losses from 24 per cent to 14 per cent of revenue in FY19 to $83 million, a statement from the company said.

In FY19, OYO had a primary presence in China and India. The company reported an increase in both daily guest check-ins across its network and in hotels and asset owners across the world. With over 43,000 asset partners, OYO hosted over 180 million guests from 120-plus nationalities between January and December 2019. The company’s gross margin in India increased from 10.6 per cent in FY18 to 14.7 per cent in FY19, indicating the strength of its business model and a positive correlation between market share and economics, the statement added.

Abhishek Gupta, Global CFO of OYO Hotels & Homes, said: “We have crossed an important milestone of achieving global revenue of $951 million in FY19, a 4.5 times increase on a year-on-year basis. OYO’s relentless focus on offering an exceptional guest experience, delivering value to asset partners and constant technological innovation, supported by the hard work and perseverance of every OYOpreneur, have been the core propellers behind this performance. As we work towards consistently improving our financial performance, ensuring strong yet sustainable growth, high operational and service excellence and a clear path to profitability will be our key to our approach in 2020 and beyond.”

In FY19, business operations in India contributed to nearly 63.5 per cent, or $604 million, of the consolidated figure as the business clocked a 2.9x year-on-year growth. Nearly 36.5 per cent, or $348 million, was contributed by the company’s operations outside India, primarily China, signifying its strong commitment towards building a sustainable global business at scale with improved operating efficiencies, said the statement.