SoftBank’s troubled hotel company Oyo targets US vacation rental market
Indian firm plans to expand from 50 existing vacation properties in the US
Indian hotel company Oyo is joining several U.S. companies in a bid to grow its vacation-home rental business in the U.S., according to the Wall Street Journal.
The model involves either managing vacation-home rentals on behalf of owners or renting out apartments, which can then be sub-leased to travelers.
Oyo, which specializes in managing budget hotels and has raised $3 billion from SoftBank, currently operates about 50 vacation homes in the U.S., and is now looking to expand by targeting a wider range of travelers.
“We don’t think of hotels and vacation homes as two different businesses,” Oyo’s chief executive, Ritesh Agarwal, told the Journal.
Agarwal said he believed the vacation-home model would pose fewer regulatory hurdles than the short-term-rental model, which is subject to restrictions in many major cities. In smaller towns, vacation homes will come under less scrutiny.
Since launching in 2013, Oyo has grown at rapid speed, but has faced setbacks in the past year. Oyo has captured loads of negative headlines in recent months. Last week, it said it is laying off 5,000 workers globally as it looks to reduce spending. That followed a New York Times report that found some of the hotel’s partners felt swindled and lied to as it expanded rapidly.
“There has been a significant amount of feedback among high-growth companies world-wide, basically saying that the market appreciates a trend towards profitability very significantly,” Agarwal said.
[WSJ] — Sylvia Varnham O’Regan