Hospitality and travel-tech firm OYO on Tuesday said the company is planning to double the number of premium hotels in India with the addition of around 1,800 such hotels in 2023.

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The move is aimed at capitalising on the surge in business travel by increasing its footprints across all the major business cities.

OYO currently has about 1,800 premium hotels in India. Its premium hotel brands include Townhouse Oak, OYO Townhouse, Collection O, and Capital O.

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"OYO plans to add approximately 1,800 premium hotels this year," the company said. It said the 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.

OYO's focus on premium hotels started in the last quarter of 2022 when it added more than 400 premium hotels between October and December.

"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," Anuj Tejpal, chief merchant officer at OYO, said.

The demand for premium segment hotels has picked up significantly in the last few months.

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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.

In a report, Icra said India's hotel room supply pipeline is expected to grow at a 5-year CAGR of 3.5-4 percent, adding around 15,000 rooms to the pan-India premium inventory of about 94,000 rooms in FY2023.

Pan-India premium hotel occupancy is expected to be 68-70 percent for FY23, the credit rating agency said in the report.