Global hospitality technology platform OYO has announced that it plans to double the number of premium hotels in India in 2023. It plans to support the surge in business travel by increasing its footprint across all the major business cities.
Its premium hotel brands include hotels such as Townhouse Oak, OYO Townhouse, Collection O and Capital O. OYO plans to add approximately 1800 premium hotels this year. OYO’s focus on premium hotels started in the last quarter of 2022 when it added more than 400 new premium hotels between October to December. OYO’s expansion will focus on key business cities such as Bengaluru, Hyderabad and Chennai in South India, Delhi and Noida in North India, Kolkata in East India and Mumbai in West India.
Hotel owners will benefit from a bouquet of specially curated services such as enhanced exposure of the hotel to potential guests with the help of OYO’s network of over 15000 corporate accounts and more than 10000 travel agents across India and payment flexibility. This is over and above the customers that come through OYO’s App, website and all the key Online Travel Agents (OTA’s). OYO’s app is the third most downloaded travel app in the world.
In addition to this, they also get the advantage of the trust and safety of the OYO platform, and round-the-clock customer support through OYO’s Artificial Intelligence powered Yo! Chat and end-to-end proprietary customer support platform.
The demand for premium segment hotels has picked up significantly in the last few months. This could be attributed to the surge in domestic leisure travel, transient travel, pent-up demand from meetings, incentives and weddings segment, and gradual recovery in business travel and foreign tourist arrivals (FTAs).
A report by credit rating agency ICRA says that India’s hotel room supply pipeline is expected to grow at 5-year CAGR of 3.5-4 per cent adding approximately 15,000 rooms to the pan India premium inventory of approximately 94,000 rooms in financial year 2023. As per the findings of the report, pan-India premium hotel occupancy is expected to be 68-70 per cent for FY23. The service industry is anticipated to lead the demand for business travel in the first quarter of the year 2023.
The increase in air travel is also leading to higher demand for premium hotels. Directorate General of Civil Aviation (DGCA) shows that India’s domestic air traffic rose 95.72 per cent year-on-year (YoY) to 125.42 lakh passengers in January this year as compared with 64.08 lakh passengers in the corresponding period last year.
Elaborating on the plan, Anuj Tejpal, Chief Merchant Officer, OYO said “We are seeing a clear trend of people’s willingness to spend more on experiences. Therefore, hotels are now offering additional services and amenities to enhance the travel experience and make it more convenient for guests. Our expansion plan focusing on the growth of premium hotels is aligned with this trend”.
While traditional business travel is a strong growth opportunity, alternative business travel adds an additional layer of growth in 2023. Bleisure travel, extending work trips for leisure, and flexcations, combining remote work with leisure travel are upcoming trends that are likely to shape the growth.