OYO Hotels & Homes is to invest US$50 million (NZ$ 74.4 million) to expand in Vietnam.
The India-headquartered hotel chain, which is backed by SoftBank, officially launched in Vietnam yesterday (02/07) and already has plans in place to launch in over 90 hotels across 6 major cities in Vietnam: Hanoi, Ho Chi Minh City, Da Nang, Phu Quoc, Vung Tau, and Nha Trang.
In a statement, OYO's country head for Vietnam Dushyant Dwibedy shared the company's goal to become the largest hotel chain in Vietnam by the end of 2020, with 20,000 rooms across 10 cities.
Whilst this main sound a lofty target, the chain has already achieved similarly dramatic growth in Indonesia, becoming the leading hotel chain in the country in just 9 months. Currently, OYO has a total of 720 Indonesian hotels with 20,000 rooms across 80 cities, and 308 more hotels are scheduled to be operating within 2 months.
Dwibedy cited several factors when explaining how the goal of a quick jump to 90 Vietnamese hotels was achieved. He noted that most hotel partners of OYO in Vietnam are mid-range and budget hotel owners with a smaller number of rooms, who are willing to adopt OYO's technological solutions to boost numbers and transform their business.
Furthermore, having already launched in Indonesia, Malaysia, and the Phillippines, OYO has already learnt a great deal about operating within the South East Asian market. The support of its teams in the region was invaluable in identifying hotel conversions, Dwibedy added.
In China, OYO is shifting to a guaranteed revenue model. Hotel owners using the service a promised a fixed income no matter their occupancy rates, whilst OYO takes commissions over and above this target.