New Delhi, Delhi, India | 18th February 2020: OYO Hotels & Homes, the world’s leading hospitality chain, has today announced its financial results for FY 2019 (April 2018 to March 2019). As per audited financials, the company’s consolidated revenue stood at USD 951 million, which is 4.5X (year-over-year) higher from FY2018 when the company reported a revenue of USD 211 million.
As a six-year-old young startup, OYO’s business across markets today is seen to evolve through three key growth stages. In stage one, when we start our operations in new markets, the focus of the company is on scale and presence; in stage two, when we have achieved scale and presence, the focus is on creating a strong brand resonance and ensuring improved gross margin, for the value proposition we bring in, while continuing to invest in accretive growth. In mature markets like India, where OYO is in the third stage of its growth journey, the focus of the company is to maintain strong brand preference while ensuring we have a clear path to profitability, enabled by accretive growth, operational excellence, and strong gross margin. In this context, this FY 19, business operations in India contributed to nearly 63.5% or USD 604 million of this consolidated figure as the business clocked a 2.9X (y-o-y) growth. Nearly 36.5% or USD 348 million was contributed by the company’s operations outside India, primarily China, signifying its strong commitment towards building a sustainable global business at scale with improved operating efficiencies.
The company reported an increase in both daily guest check-ins across its network as well as an increase in hotels and asset owners across the world. With over 43,000 asset partners, OYO hosted over 180 million guests from 120+ nationalities between January – December 2019.
In FY 2019, OYO had a primary presence in China and India. The inherent costs of establishing new markets, including those related to talent, market-entry, operational expenses among others, resulted in an increase in OYO’s net loss percentage in the near-term, which grew from 25% in FY18 to 35% of revenue in FY19 to USD 335 million. At the same time, in mature markets like India, the company reduced its losses from 24% to 14% of revenue in FY19 to USD 83 million.
Commenting on the development, Abhishek Gupta, Global CFO of OYO Hotels & Homes, said, “We have crossed an important milestone of achieving global revenue of USD 951 million in FY 2019, a 4.5 times increase on a year-on-year basis. OYO’s relentless focus on offering an exceptional guest experience, delivering value to asset partners and constant technological innovation supported by the hard work and perseverance of every OYOpreneur has been the core propellers behind this performance. As we work towards consistently improving our financial performance, ensuring strong yet sustainable growth, high operational and service excellence and a clear path to profitability will be our key to our approach in 2020 and beyond. The company’s increased focus on corporate governance and building a high-performing and employee-first work culture will also drive this next phase of sustainable growth for us. We look forward to adding value to the experience of travellers and asset partners across the globe.”
In 2019, OYO also continued to build a loyal guest base, with over 90% revenue coming from repeat and organic user base with repeat alone contributing to 73% of revenues.
Since China and other international markets were in development and investment mode during that time, they contributed to 75% of the losses for FY19 (USD 252 million). These markets constituted 36.5% of the global revenues. While consistently improving operating economics in mature markets like India where it’s already seeing an improvement in gross margins, the company is determined to bring in the same fiscal discipline in emerging markets in the coming financial year.
Sustainable Growth with Impact
The company’s gross margin in India increased from 10.6% in FY18 to 14.7% in FY19 indicating the strength of its business model and a positive correlation between market share and economics.
The OYO app is now among Top 3 Hotel booking apps globally with over 2.3 million downloads till October 2019 which has now increased to 10 million+ downloads. The company continues to delight its guests keeping in mind customer preferences, and its average ratings on OTA (Online Travel Agency) platforms were 7.5+/10.
