OYO Rooms to expand into UK market

Plans to invest 40 million pounds ($53 million) to launch in 10 British cities in the next 18 months

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Britain's budget accommodation market with a franchising and marketing strategy to sign up 300 independent hotels before 2020, its founder told Reuters on Wednesday.

Marking its first expansion outside Asia, the franchiser said it plans to invest $53 million to launch in 10 British cities in the next 18 months via a smartphone-based service for franchise owners and guests.

Whitbread's Premier Inn chain is the leader in Britain's economy hotel industry. Other branded operators include private equity-backed Travelodge and Holiday Inn Express, a unit of Intercontinental Hotels Group.

Ritesh Agarwal, OYO's 24-year-old founder, said in a phone interview that his company will select hotels from among Britain's 35,000-40,000 independent operators, offering redesign, property management and marketing to help them compete.

"By focusing on the customer and small asset owners, we tend to out compete some of our more traditional hotel chain rivals," said Agarwal, one of India's start-up success stories.

Britain's hotel market is highly fragmented, with small, independent operators running half the hotels. OYO says hotels in its network will benefit from its partnerships with Expedia, Booking.com and other travel platforms.

OYO said it had hired London restaurant entrepreneur Jeremy Sanders, who co-founded and sold Italian fast-food chain Coco di Mama, to run its British business. By 2020, OYO said it aimed to hire 100 staff in Britain and offer 5,000 hotel rooms.

Agarwal said OYO would launch its first two hotels in the London districts of Edgware and Ilford next month.

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