OYO isn’t playing small anymore. The Indian hospitality giant is throwing down serious bets, aiming to almost double the slice of booking revenue coming from its own company-managed hotels — from a modest 22% now to a hefty 44% by FY26. It’s not just about grabbing numbers; the plan includes expanding these directly operated properties from about 1,300 to a solid 1,800 and stretching out from 124 to nearly 300 cities across India.
This isn’t some random shift. It signals a clear, renewed obsession with mid to premium brands like Townhouse, Capital O, Palette, and SUNDAY. Hotels where OYO has direct control have been outperforming franchises big time — better occupancy, happier guests, and stronger loyalty. Varun Jain, the COO, puts it bluntly: this move aligns perfectly with OYO’s 2025 vision, which boils down to sharper guest experiences and fatter profit margins in an Indian hospitality market that’s brutally competitive.
And while OYO’s gearing up for an IPO filing in late 2025 and a public debut by early 2026, it’s backed by some serious heavyweights — SoftBank, Microsoft — ready to bankroll its ambitions to shake up hospitality not just in India but beyond.
This article digs deep into OYO’s operational style, its financial backing, the battles it’s fighting, and why company-managed hotels might just be the ace up its sleeve.
1. Introduction: OYO’s Focus on Company-Managed Hotels
Here’s the gist: OYO’s all in on company-managed hotels — the ones it runs with an iron grip. Right now, these spots rake in 22% of booking revenue. The bold plan? To crank that up to 44% by FY26. How? By boosting the number of such hotels from around 1,300 to 1,800 and expanding into nearly 300 cities — many of them under-the-radar leisure and pilgrimage spots.
Why the fuss? Because OYO knows that controlling operations directly is the magic wand for better quality, stronger loyalty, and fatter margins. The numbers don’t lie: company-managed hotels fill rooms nearly three times as often as franchise ones and score way higher on guest ratings. It’s a risky bet — but one that’s already paying off.
2. OYO’s Working Model and Revenue Structure
2.1 Company-Managed Hotels Explained
Franchise model? That’s old news. Company-managed hotels are a different beast. Here, OYO calls the shots every single day — from staff to standards. This tight leash means guests get a consistent, reliable experience, whether they’re in Delhi or Darjeeling. No more guessing games. OYO runs the show, making sure every corner sparkles and every interaction feels smooth.
2.2 Revenue Model
The money flows mostly from room bookings on OYO’s platform. Company-managed hotels now pull in 22% of that revenue slice, and the goal is to double it. The reason? Direct control means OYO can squeeze better margins — more rooms filled, more repeat customers. Ancillary stuff like holiday homes and coworking spaces adds cash but can’t compete with the core profit from these managed hotels.
3. Founders, Funding, and Growth Trajectory
3.1 Founding Story
Ritesh Agarwal started OYO in 2012 with a simple idea: fix India’s chaotic budget hotel market by standardizing affordable stays. What began as a humble aggregator morphed into a global force aiming to make quality lodging accessible to all.
3.2 Funding and Valuation
OYO’s raised jaw-dropping funds — over $4.5 billion — from big guns like SoftBank and Microsoft. The IPO, postponed a couple of times, is finally lined up for late 2025 or early 2026, eyeing a valuation north of $6 billion. Investors aren’t just betting on a hotel aggregator anymore; they see a full-on hospitality powerhouse in the making.
3.3 Financial Performance
The numbers are screaming growth. A 172% jump in net profit to INR 623 crore in FY25 and a 20% revenue hike to INR 6,463 crore. That’s the financial oomph OYO needs to back its ambitious expansion spree.
4. Products and Services Portfolio
OYO’s spread covers multiple stays and travel needs:
- Company-Managed Hotels: Mid to premium brands like Townhouse, Capital O, Palette, and SUNDAY — the crown jewels, thanks to direct control and better guest experiences.
- Franchise Hotels: Partner-operated properties that form a big chunk but don’t offer OYO the same level of control.
- Holiday Homes: Cozy short-term rentals for travelers wanting a homely feel.
- Coworking Spaces: Newer ventures offering flexible office solutions.
- Corporate Stays: Tailored lodging for business travelers.
Among these, company-managed hotels are sprinting ahead, thanks to superior quality and profitability.
5. Problems Solved by OYO
OYO’s rise is no accident — it’s fixing deep-rooted issues:
- Market Fragmentation: India’s hotel scene is a mess. OYO brings some order with its brand standards.
- Quality Worries: Company-managed hotels cut the risk of nasty surprises.
- Tier-2 and Tier-3 Access: OYO isn’t just metro-focused; it’s reaching smaller cities where travel demand is rising fast.
- Operational Gaps: Direct control smooths over the usual franchise hiccups.
- Tech Savvy: From seamless bookings to 24/7 support, OYO makes staying hassle-free.
For Indian travelers hunting affordable yet quality stays, OYO hits the sweet spot.
6. Industry Growth Trends and Market Outlook
India’s hospitality scene is on fire — driven by domestic tourism surges, booming business travel, and more internet users. Government tourism pushes add fuel to the fire.
Watch these trends:
- Premiumization: Travelers want better quality and are ready to pay.
- Tech Adoption: AI, automation, and apps are changing how hotels operate.
- Shift to Managed Properties: Operators want control for quality.
- Geographic Expansion: Beyond metros, into pilgrimage and leisure towns.
OYO’s company-managed hotel strategy is perfectly timed to ride these waves.
7. Competitive Landscape
India’s hospitality tech market is jam-packed:
Direct Rivals
- FabHotels: Mid-segment, smaller city focus.
- Treebo Hotels: Budget and mid-scale aggregation.
- Zo Rooms: Regional budget hotel aggregator.
Indirect Rivals
- Airbnb: Disrupting hotels with holiday homes.
- OTAs: MakeMyTrip, Cleartrip offering full travel bookings.
- Global Chains: Marriott, Hyatt pushing into India’s premium market.
OYO’s edge? Owning the guest experience hands-on. That translates to better service, occupancy, and loyalty — key in a sea of mostly aggregator-heavy rivals.
8. OYO’s Journey and Evolution
8.1 Early Days and Growth
OYO began by bringing order to chaotic budget hotels with a unified brand and tech platform. The goal: affordable, reliable stays everywhere.
8.2 Company-Managed Hotels Launch
Launched in FY23, this segment started small — under 2% of booking revenue — but quickly soared, with guest ratings jumping to 4.6 (from 4.0 for franchises) and occupancy nearly tripling.
8.3 Expansion Drive
By FY26, OYO plans 1,800 company-managed hotels, eyeing emerging cities like Mohali, Faridabad, Jalandhar, Cuttack, and Darjeeling — spots with rising travel buzz.
8.4 IPO Prep
OYO’s third IPO attempt aims for March 2026, with a $6-7 billion valuation. It’s also rebranding its parent company, inviting public input to showcase its global urban innovation ambitions.
9. The Impact of Company-Managed Hotels on OYO’s Business
Company-managed hotels are reshaping OYO’s DNA. Direct control means better service, stronger guest loyalty, and repeat business. This drives healthier profits and builds brand muscle.
It also fast-tracks OYO’s premium and mid-tier push while reinforcing its image as a tech-driven hospitality ecosystem. In a world where travelers expect quality and convenience, this approach hits the mark — and investors are taking notice.
10. Learning for Startups and Entrepreneurs
OYO’s tale is a goldmine of lessons:
- Control = Quality: Direct management changes the game.
- Ride the Trends: Premiumization and tech aren’t buzzwords; they’re survival tools.
- Diversify Revenue: Don’t bet all on aggregation.
- Spend Smart: Capital helps but strategy steers.
- Earn Trust: Consistency breeds loyalty.
- Stay Resilient: IPO delays? No problem, keep pushing.
For startups, the trick is juggling fast growth with disciplined operations to build lasting businesses.
Conclusion
OYO’s push to bulk up company-managed hotels isn’t just a growth plan — it’s a gutsy overhaul of its entire model. Growing the portfolio by nearly 40% and doubling revenue from these hotels shows a bet on quality, control, and tech-driven service.
With solid finances, heavyweight investors, and a clear IPO roadmap, OYO is poised to ride India’s hospitality boom — premiumization, geographic reach, and all. From budget aggregator to full-fledged hospitality powerhouse, OYO’s journey is a masterclass in hustle and innovation. Keep your eyes peeled — the travel tech market is about to get even hotter.
The Startups News
TheStartupsNews.com tracks the ever-changing startup world with a hawk’s eye. With OYO doubling down on company-managed hotels and gearing for an IPO, it highlights how travel tech startups are rewriting India’s hospitality story. From innovation and funding to growth tactics, it’s the go-to source for entrepreneurs and investors wanting the lowdown on India’s startup scene.
