One of India’s biggest hotel chain, OYO, is expanding and its latest stop is Las Vegas. OYO has closed a deal buying Hooters Casino Hotel and rebranding the property as the OYO Hotel and Casino Las Vegas. It was announced last Friday that the $135 million deal is OYO’s first investment in Sin City.
“We are excited to be here as we believe Las Vegas is an exciting city in which to invest …” said Abhinav Sinha, OYO chief operating officer and partner, in a statement. “With our newest hotel in Las Vegas, we are certain OYO Hotel & Casino Las Vegas will become their preferred place to stay and truly enjoy Las Vegas in the coming months.”
OYO partnered with Highgate, a US hospitality investment firm to manage the hotel while the casino will continue to be managed by the Nevada-based Paragon Gaming.
Last June OYO hotels and homes committed $300 million toward building a footprint in major U.S cities, such as New York, San Francisco, and Los Angeles. The 657-room property puts OYO among the top three hotel chains in the world in terms of size. OYO is located in 800 cities in over 80 countries including the U.S, U.K, and China. The company is currently valued at around $10 billion, owning more than 112 hotels across 60 U.S cities.
OYO Rooms is a popular website amongst travellers looking for economical lodging options. It is owned by Oravel Stays Private Limited which is located in Gurgaon, Haryana, India. Currently, the largest such website in India it has 450,000 listings in over 500 cities in India, China, Malaysia, Nepal, Vietnam, and Japan. The company is also operating OYO Home, a platform for finding short-term rentals. Oravel Stays was found in 2012 by 18-year-old Ritesh Agarwal, who developed a website for listing and booking budget lodging. Shortly after he received a grant of $100,000 which enabled him to expand his project launching in countries such as Malaysia and Nepal.
Controversies over OYO
In 2019, OYO Room announced plans to implement a digital register mechanism allowing them to share customer data in real-time with government bodies. Furthermore, they have been accused off using predatory pricing also known as undercutting. It is a pricing strategy in which provides a service for a very low cost to attract new customers or to drive competition out of the market. The company is still sceptical about how it will make a low-cost hotel business model that fits that U.S market, where there is already a ton of competition. OYO’s management remains confident that they will provide the cheapest lodging option.