BTN Europe presents an overview of business travel and MICE predictions for this year
ExCeL London - 24-25 February 2021
Airbnb has invested between $100 million and $200 million in India-based hotel company OYO Hotels & Homes, according to Reuters. The capital is part of OYO's $1 billion series E round of fundraising, which was announced in September and led by SoftBank Group.
This investment will greatly expand Airbnb's reach into the growing Indian and Chinese markets, which means traditional hoteliers will face increased competition from both the home rental giant and the fast-growing OYO, which claims to be the sixth-largest hotel chain operator in the world. "Airbnb's strong global footprints and access to local communities will open up new opportunities for OYO Hotels & Homes to strengthen and grow while staying true to our core value proposition," said OYO global chief strategy officer Maninder Gulati.
OYO launched in 2013 with a single hotel, focused on the budget leisure market, but as of December 2018, it had 458,000 rooms, mainly in India and China. It has ramped up expansion plans into the U.S. with its OYO Townhouses brand, which is geared toward Millennial travelers, and it plans expansion into Europe, adding to OYO's current handful of U.K. properties.
Globally and across brands, OYO grew nearly sixfold year over year from 13 million room nights in December 2017 to 75 million in December 2018. Its model is based on transforming unbranded hotels through a variety of means, including property renovations, guaranteed services like air conditioning and free Wi-Fi, and proprietary technology that manages revenue, pricing, inventory and certain operations.
The Airbnb investment in OYO has relevance for corporate travel planners. According to the Global Business Travel Association's latest BTI Outlook, India tops the list of countries with the fastest predicted growth in business travel, at 71 percent between 2017 and 2022, when it will reach $63.5 billion. China was second, with a 37 percent growth rate and anticipated 2022 business travel revenue of $475.6 billion.
To meet this demand, OYO also is expanding its business travel market, which dovetails with Airbnb's push into—and increasing acceptance of—this segment through Airbnb for Work. In 2018, OYO added more than 2,300 salespeople. Now, its omnichannel, enterprise and corporate business accounts for 20 percent of OYO's sales revenue, according to its annual report. Additionally, over 16,000 corporate accounts use OYO in India.
OYO B is the hotel company's corporate booking product. Those signed up can use the OYO app's corporate mode to look for and book from a selected list of hotels that have received positive feedback from previous corporate guests. For guests whose companies are enrolled, OYO B Direct then can provide a GST invoice, which breaks down the goods and services tax India introduced in July 2017 and is required for business transactions.
OYO also has created the SilverKey brand for executive stays in India. It operates in Chennai, Cochin, Coimbatore, Hyderabad and Trivandrum but is expected to open soon in 10 more cities, including Bangalore, Delhi, Kolkata and Mumbai.