Oyo acquires Las Vegas’ Hooters hotel & casino

Valued at over US$10 billion, Oyo has become one India’s most sought after startup attracting marquee investors such as Sequoia Capital, Lightspeed …

Leading hospitality and hotel aggregator Oyo Hotels has announced that it has acquired the Hooters Casino Hotel in Las Vegas, in a deal estimated to valued at around US$ 135 million.

The 657 room hotel and 35,000 square feet casino will now be rebranded as Oyo Hotel & Casino, Las Vegas.

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Hospitality investment firm Highgate will manage the hotel while Paragon Gaming will continue to manage the casino operations, Oyo said in a statement.

The casino resort’s acquisition, a first by an Indian startup in America’s casino capital, is part of Oyo’s strategy to go for global expansion after becoming India’s largest hotel chain with over 173,000 rooms under its management.

“We believe Las Vegas is an exciting city in which to invest as the market continues to evolve with projects such as the new Las Vegas Raiders NFL stadium and the $1 billion expansion of the Las Vegas Convention Center. As we continue to focus on bringing to life our popular concept of ‘comfort design’ and delivering chic hospitality experiences, we are increasingly exploring new ways to connect with our customers, from millennials, to young executives and families, in every city we enter,” said Abhinav Sinha, chief operating officer and OYO Hotels and Homes USA.

“With our newest hotel in Las Vegas, we are excited to cater to a completely different audience segment,” said Ritesh Agarwal, founder and chief executive, OYO Hotels and Homes.

Valued at over US$10 billion, Oyo has become one India’s most sought after startup attracting marquee investors such as Sequoia Capital, Lightspeed Ventures, Airbnb and SoftBank Group.

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With Eyes On Global Market, OYO’s Ritesh Agarwal To Take A Global Role

As a part of these transactions, Lightspeed Venture Partners and Sequoia India, had sold a part of their shareholding in OYO to help Agarwal increase …
With Eyes On Global Market, OYO’s Ritesh Agarwal To Take A Global RoleWith Eyes On Global Market, OYO’s Ritesh Agarwal To Take A Global Role

Image Courtesy: TechInAsia

Founder of the Indian hospitality unicorn OYO Hotels and Homes, Ritesh Agarwal will reportedly take up a larger role in the company’s Singapore office as the company plans to establish itself as a global player.

“My deeper engagement in the global business is a natural progression given our continued growth over the last couple of years and the opportunities in the US, Europe, China, and Southeast Asia,” Riteshreportedly said. This move is said to be a part of the ongoing structural changes in OYO for the past 12 months as the company continues expanding its global operations.

Since its launch six years ago, OYO has moved from a hotel aggregator to a franchisee model. The company has expanded its services tomore than 800 cities in 74 countries, including the US, Europe, UK, India, Malaysia, Middle East, Indonesia, Philippines, and Japan. Last week, OYO has also announced its expansion to Las Vegas in the US in partnership with Highgate.

Also last month, the company segmented its business under two entities separately handling Indian hotel business, and international and technology business. This was closely followed by Agarwal, through RA Hospitality Holdings (Cayman), signing a$2 Bn primary and secondary management investment round, supported by global institutional banks and his financial partners, subject to regulatory and shareholder approvals.

As a part of these transactions, Lightspeed Venture Partners and Sequoia India, had sold a part of their shareholding in OYO to help Agarwal increase his stake while remaining invested and committed to the company’s long-term mission.

Agarwal also reportedly added, “these international plans do not change his continued commitment to India, one of our key home markets, which continues to grow. I will continue to be on the board of Oyo’s global parent entity — Oravel Stays.”

Balance Sheet Of Over $1.5 Bn Without Profits

OYO reportedly claims to have a strong balance sheet with over $1.5 Bn, and has seen a 4.4x YOY growth in revenue in June 2019. OYO has raised $1.7 Bn of funding from investors such as Airbnb, SoftBank Vision Fund, Greenoak Capital, Sequoia Capital, and Hero Enterprise.

The company is now said to be in talks to raise a fresh roundof $1 Bn funding at a valuation of $10 Bn. This would be almost double its current valuation of $5 Bn.

Talking about profits, Agarwalreportedly said, “Given how we continue to make forward-looking investments in the form of Capex support to our asset owners, developing our technology, onboarding pricing, revenue management, talent acquisition, training and developments at the group level, we are not profitable yet.”

However, he added, “Given our efficient management and economies of scale, we are generally profitable at the unit level, which is unheard of at this early stage in the business.”

Anothermedia report has noted Agarwal saying that the inputs given by SoftBank’s CEO Masayoshi Son have always been transformational for OYO’s business. Giving an example of this, he said, “With Son’s guidance we have learnt the art of taking calculated risks.”

“At a time when we were just operational in India along with an initial footing in Malaysia. I asked Son if we could enter China, and he asked me about our balance sheet, which was $150- $200 Mn. He then went on to suggest that we invest 25% of our balance sheet in China and see if we could make a positive difference there.” he added.

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India startup Oyo buys Vegas casino hotel in US expansion

NEW YORK — SoftBank Group-backed Indian startup Oyo Hotels & Homes has bought Hooters Casino Hotel, its first property in Las Vegas as it eyes …

NEW YORK — SoftBank Group-backed Indian startup Oyo Hotels & Homes has bought Hooters Casino Hotel, its first property in Las Vegas as it eyes further expansion in the U.S. market.

The deal, announced by Oyo Friday, was handled by its American partner Highgate, which will oversee operations at the rebranded Oyo Hotel & Casino.

The two companies paid $135 million for the property, said a person familiar with the matter.

The hotel is located near the city’s tourist hub, the Las Vegas Strip, and has 657 rooms across 19 floors, as well as a 35,000-square-foot casino.

The new addition marks the budget chain’s foray into a higher-end segment of the U.S. hotel market, as it adapts to a business environment different from home.

Oyo Hotels & Homes and its American partner Highgate has paid $135 million to acquire Hooters Casino Hotel, rebranded as Oyo Casino & Hotel Las Vegas. © Getty Images

Founded in 2013 by then 19-year-old Ritesh Agarwal, Oyo has a portfolio comprising over a million rooms — compared with 140,000 just a year ago — across 23,000 hotels and 125,000 vacation homes. It grew to its current scale by reforming independently run, and often underdeveloped, budget accommodation with standardized design and practices, operating them under its brand.

The startup has raised funds from investors including Airbnb and Sequoia Capital, apart from Softbank’s Vision Fund.

Oyo also provides apps that range from booking rooms to managing a hotel, and has developed algorithms that calculate a hotel’s projected occupancy rates and revenue.

In June, Oyo announced its plan to invest $300 million in the U.S., where it operated dozens of hotels. But some raised concerns over whether Oyo could adapt its approach, which has achieved huge success in developing countries, to the American market.

“With our newest hotel in Las Vegas, we are excited to cater to a completely different audience segment and are certain that this will be the perfect start to OYO’s journey in Las Vegas,” Oyo CEO Agarwal said in a statement Friday.

Abhinav Sinha, COO and partner at Oyo Hotels & Homes USA, said the company is “increasingly exploring new ways to connect with our customers, from millennials, to young executives and families, in every city we enter.”

Positioned as a flagship property for the Indian chain, the Las Vegas hotel will be renovated to reflect Oyo’s brand, which is expected to be completed this year. Paragon Gaming will continue to operate the casino.

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SoftBank-backed Oyo, Known for Budget Stays, to Rebrand Hooters Hotel in Vegas

Bengaluru: SoftBank Group Corp-backed Indian hospitality startup Oyo will rebrand Hooters Casino Hotel in Las Vegas in a deal that a source with …

Bengaluru: SoftBank Group Corp-backed Indian hospitality startup Oyo will rebrand Hooters Casino Hotel in Las Vegas in a deal that a source with knowledge of the matter said was worth $135 million.

Oyo said on Friday it would partner with restaurant operator Highgate, which runs the Hooters hotel in Vegas, to rebrand it Oyo Hotel and Casino. The hotel, with 657 rooms and a 35,000 square-feet casino located near the famed Las Vegas Strip, will continue to be managed by Highgate.

Oyo and Highgate will spend $20 million in total to renovate the hotel, which will remain open during the transformation, the source said.

The deal, Oyo’s first such in the United States, suggests the startup is setting its sights high, but founder Ritesh Agarwal told Reuters in an interview that the company would continue to focus on its mainstay: large numbers of middle-class travellers looking for affordable accommodation.

“Our focus on the economy and mid-scale hotels will continue to remain, because, all said and done, that’s the largest population of the world,” Agarwal told Reuters on Thursday, ahead of the deal, speaking over the phone from Gurugram.

As it looks to expand and targets the world’s middle class, Oyo plans to hire up to 4,000 mid-and-senior level employees for domestic operations in the next six months, Agarwal said. Tens of thousands of junior employees, including front office staff, are likely to be hired for the hotels it franchises or leases out, he said.

Oyo, founded by 25-year-old Agarwal in 2013, started as a budget hotel aggregator in India. It expanded rapidly into markets such as China, Europe and the United States, and now manages over 23,000 properties across the world.

Valued at about $10 billion, Oyo now caters to an increasing number of corporate travellers who frequent its hotels because of affordable rents, cushioning the company from seasonal changes associated with the industry.

Agarwal, who recently took out a loan to buy back $2 billion worth of equity in the company, said he intended to spend on building technology and talent, not on discounts.

India and China account for two-thirds of the company’s revenue, while a fifth comes from Europe and the United States, Agarwal said.

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Expert’s Voice: How India’s Oyo Hotels is winning the hotel war in China

Softbank Group, Sequoia Capital, Lightspeed Venture Partners, and even Airbnb have all taken notice, combining for over $1.5 billion in investments, …

Oyo hails from India, where 25 year-old founder Ritesh Agarwal persuaded tens of thousands of unbranded, cheap hotels and hostels to rebrand and hop on board as franchises. It’s a relatively simple transition for new franchises: add WiFi, clean (and branded) linen, air conditioning, and re-paint the exterior to reflect the new branding. Almost overnight, small hotels gain a brand mark that allows travelers to know to expect a certain level of quality all while handing hotel managers a marketing advantage.

The model is proving to be a perfect match for China, which, like India, is already rife with inexpensive hotels looking for a similar advantage.

Oyo openings are particularly active in “New Tier 1” cities like Xian and Chongqing, where economic and manufacturing centers experiencing massive growth are in need of overnight accommodations, where Oyo’s slight step up in quality and recognizable branding are proving to be attractive to consumers and hoteliers alike.

Softbank Group, Sequoia Capital, Lightspeed Venture Partners, and even Airbnb have all taken notice, combining for over $1.5 billion in investments, putting Oyo’s value at $5 billion.

Agarwal told the Wall Street Journal that he believes Oyo’s room count could reach 2.5 million worldwide by 2023.

“Doing these things at a consistent scale for hundreds of thousands of rooms today and millions of rooms in the future is where the big challenge comes,” he said.

And when it comes to scaling out, Ritesh and Co are busy hiring professionals to assure that expansion is kept on pace. As of today, Oyo is hiring for 705 positions. Just two weeks ago, it had 660 openings.

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