YO Hotels & Homes announced last month that it has signed a deal with Highgate to create its first key flagship property in Las Vegas, OYO Hotel & Casino Las Vegas, formerly known as Hooters Casino Hotel. Ritesh Agarwal, CEO & Founder of OYO Hotels & Homes, spoke with Yogonet about the transformation the venue will undergo this year, and his expectations for the US market.
What innovations, changes or novelties can we expect from the transformation, and how will you set OYO’s footprint in the place?
We will look at amenities that will work best keeping in mind the needs of our customers, from millennials to young executives and families. This will include upgrading some of the existing amenities like F&B options like Hooters (largest grossing Hooters franchise restaurant), the largest SteaknShake in the US (190 seats), poolside bar, 24 hours gym, gaming at the Casino, free parking, all of which makes it convenient for guests, and city dwellers, etc. We are also currently exploring other potential amenities as well. The property will undergo an exciting transformation to be completed this year. We cannot share specifics on the investment in the renovation and upgradation as work is still in progress.
What differences in business strategies and/or conditions could you mention as compared to your operations in India, China and Europe?
The US is a mature market. The economy segment has fared well this year, due partly to a decrease in the supply of available rooms. For the first five months of 2019, occupancy rates for economy hotels rose 2.1% from the same period a year earlier, according to lodging-data provider STR. That compares with an increase of just 0.4% across all categories. As an expert rightly put it, it’s a segment that’s ripe for the picking. If you think of it from the asset owners' perspective, in Spain, 72% of the accommodation offer is managed by the same hotel owners, when in France they are only 20% and in the United States about 30%. And this is where we can help: thanks to our technology, operational expertise and revenue management systems, small hotels can improve their revenue management. From a demand perspective, as per a recent report, inbound and domestic tourism numbers are continually set to increase annually in the US. Domestically, tourism numbers are forecast to increase by 1.8% between 2019 and 2023 and internationally by 2.7% within these years. The average spend is also increasing. We are seeing a good influx of travelers, both business and leisure, looking for chic and comfortable hospitality experiences at prices never thought of before. As an example, as per a recent report, from the Bureau of Labor Statistics, new Dallas-Fort Worth led the nation's metro areas in job growth in 2018 by adding over 116,400 jobs over the course of the year. Trade, transportation, and utilities drove the most growth in the city for the 12-month period, making them the largest job creators, followed by the professional and business services sector. Leisure and hospitality ranked third overall but had the largest percentage increase at 4.1 percent.
We, at OYO, see this as a huge opportunity and are therefore investing approximately $40 million in Texas alone, out of the $300 million committed earlier this year. We are seeing tremendous growth in our business in State, with Texas topping the list of States with maximum OYO hotels, with now 44 buildings open. Similarly, Las Vegas continues to be world tourist destination, with both business and leisure travel on the rise. There is a growing need for chic and comfortable hospitality experiences at prices never thought of before. We are therefore fully focused on our mission of creating quality living spaces and enabling our guests to experience #LivingTheGoodLife, starting with the OYO Hotels & Casino that is currently undergoing an exciting transformation.
“ We are investing approximately $40 million in Texas alone, out of the $300 million committed earlier this year."
What’s your approach for the fast-growing US sports betting market, or what effects could it have in your operations and projects in the US?
We at OYO are incredibly excited about the opportunity offered by the United States to bring good quality hospitality experience to millions of city dwellers and travellers. Earlier this year, we announced our plan to invest $300 million in the U.S. As a new-age hospitality company, we currently offer great living spaces throughout its 112+ OYO Hotels in more than 60 cities and 21 states. Led by a strong team of more than 450 OYOpreneurs across 15 states, the company’s ability to win customers by introducing its popular concept of ‘comfort design’, and deliver value chic hospitality experiences at hard to ignore prices, makes it possible for us to continue to grow at a scorching pace. In a short span, we have surpassed the scale of traditional and established hotel chain brands in the world, and the U.S will be key to OYO’s next wave of growth. We are committed to enabling our guests, both travellers and city dwellers, to experience #Livingthegoodlife at an OYO Hotel near them. Las Vegas is undoubtedly the leading destination for business and leisure travel, welcoming more than 42 million visitors annually. It is a place known for its gaming, entertainment, dining options, shows, conventions, and a ton of other things. It is therefore really exciting for us to announce the opening of our first property in Las Vegas, which is also our largest with over 657 rooms. We believe it is still Day 0 for us in the US and we have a lot to learn and a huge opportunity ahead of us.
What contributions will you bring with your expertise? What features could let you stand out from the competition? What is your competitive edge?
Today, OYO Hotels & Homes is South Asia’s largest, the world’s third-largest, and fastest-growing chain of hotels, homes, managed living, and workspaces with 23,000 hotels, 125,000 vacation homes with over 1 million exclusive rooms spread across 800 cities in 80 countries. We made this possible by investing in building some core competencies, supported by tech and talent.
“ It is really exciting for us to announce the opening of our first property in Las Vegas, which is also our largest with over 657 rooms."
We put our skin in the game. As highlighted already, we invest in the asset alongside the asset partners and provide free design and consulting to upgrade the infrastructure and design of the hotels. Our focus on design-driven online conversion leads to better reviews and therefore higher business while also solving for infra issues to deliver better customer experience. Our deep renovation capabilities have empowered us to add up to 80,000 exclusive keys to our chain every month at a global level. With this, we have set a new benchmark in transforming and renovating assets in a record time of 14 - 30 days — a stark contrast to the industry standard of up to 90 days. With a 1,300 OYOpreneur-strong team of civil engineers and designers, OYO Hotels has powered the transformation of thousands of buildings across territories while promoting sustainable infrastructure in the hospitality sector. We utilize AI-led design approach while evaluating guest feedback and identifying their most-preferred designs. Our efforts are supported by in-house design labs - OYOXDesign and Townhouse Design Team. Our full-scale, capability-led model allows it to undertake a 360-degree transformation and renovation while upgrading the existing structure of an asset - from flooring, plumbing, air conditioning, painting, electrical fixtures to utility upgrade.
We bring state of the art hotel tech to our hotels. Our in house and completely mobile hotel technology platform is easy to use and can be customized to help every asset owner manage their assets in the best possible way. This system is intuitive, rich with features, and takes less than two days for the front desk to master! It focused on hotel operations, customer experience, hotel finances, etc.
“ In Spain, 72% of the accommodation offer is managed by the same hotel owners, when in France they are only 20% and in the US about 30%."
Our world-class pricing and revenue management techniques help increase hotel RevPar within two months of partnership. Our pricing, inventory allocation, and revenue management is driven by data science algorithms and allows each hotel to drive max RevPAR based on its micro-location. It allows pricing to adjust dynamically to supply and demand and while in peak times pricing adjusts to deliver high rev par, in low times it also goes down to still allow for maxim customers to experience the product while increasing profits for owners. It is a boon for customers and core to the success of our business model worldwide.
We do end to end content management for our hotels. This helps them improve their performance on OTAs, with reviews improving over a period of time. We provide end to end customer support making our partner's life easy. We have a dedicated customer support team that ensures speedy response and also sets the standard for customer service, making it easier for the owners to execute. We also have over 22 OYO Skill Institutes in India, that help train young hospitality enthusiasts in housekeeping, etc.
We manage the operations for the real estate owner. Delivering quality-assured experiences is at the heart of what we do at OYO Hotels and Homes. We are committed to offering customers good quality chic living experiences at hard to ignore prices while empowering over 23,000+ real estate owners worldwide. OYO Hotels continues to bring its successful model of combining design, hospitality, and technological expertise, financial acumen and operational capabilities to real estate owners in the U.S., giving them the ability to get a higher return on investments, access easy financing opportunities, transform their hotels, and offer good quality customer service, thereby significantly increasing occupancy and profitability – in every OYO building.
Does your company plan to purchase more Las Vegas properties?
At the moment, we are focused on getting this property live. The renovation work is still underway and we should be able to open the doors to OYO Hotels & Casino, Las Vegas by the end of the year. At, OYO, we never say never, so stay tuned.