The operating revenue of hotel startup OYO India, backed by Japan’s Softbank Group, has grown more than three-fold to Rs 416 crore in 2018-19 from a year ago thanks to rapid expansion in local and overseas markets.

Thanks to the increase in revenue, losses of OYO increased only marginally to Rs 360 crore compared with Rs 355 crore a year ago. This is despite expenses shooting up to Rs 838 crore from Rs 500 crore, mainly on account of an increase in employee expenses, rent, legal charges and advertising and promotions.

Much of OYO's money comes from franchisee fees it charges hotel owners. The fee, which is a percentage of the total room rent, was more than doubled to nearly 19 percent in 2017-18, helping boost revenue, according to a Reuters report.

OYO India expects the growth momentum to continue and has projected revenue estimates of over Rs 1,400 crore in FY19. The revenue growth was driven by increase in room supply, in stayed room nights or total bookings.

Gurugram-headquartered hospitality unicorn saw room bookings grow drastically from 6 million in 2016 to 13 million in 2017 and 75 million by end of 2018. OYO has 450,000 fully controlled leased and franchised rooms globally and over 172,000 rooms in India as of December 2018.

Oyo is now present in more cities in China than in India. In India, it has presence in 200 cities and has 172,000 rooms, while in China it has presence in 280 cities with about 260,000 rooms.

The company aims to be largest hotel chain by 2023 with over a million rooms. Oyo was valued at nearly $5 billion after it raised close to $800 million from SoftBank Group and other investors in September last year.

Recently, Paytm launched hotel bookings on its platform and acquired NightStay, which offers deals on last-minute bookings at luxury hotels, highlighting the attraction of this fast-growing sector.

First Published:Feb 5, 2019 9:01 PM IST