Travel-tech firm Oyo is doubling down on its fast-growing company-serviced hotel model in India, aiming to increase its share of booking revenue from this segment from the current 22% to 44% in this financial year. The move aligns with the company’s broader strategy to drive profitability through expanding higher-margin offerings.
Currently, Oyo operates more than 1,300 company-serviced hotels in the country, primarily under its popular mid-segment brands, Townhouse Oak, Capital O, Palette and premium brand Sunday. With the expansion, the share of company-serviced hotels is also set to double to 1,800, with their presence growing from 124 cities to over 300 cities across India.
It includes cities such as Mohali, Faridabad, and Jalandhar in the north; Cuttack, Asansol and Darjeeling in the east; Mangaluru, Kollam, Port Blair, and Kasaragod in the south and Bhilwara, Vapi, Junagarh and Jalgaon in the west.
The expansion will focus on high-demand sectors such as leisure cities, pilgrimage destinations, and business corridors, and where property owners are open to long-term partnerships with Oyo. These company-serviced hotels offer property owners the options of revenue sharing or fixed rentals. Earlier this year, Oyo had announced its plan to add 500 hotels at major religious centers across India to support the government’s programme to boost spiritual tourism in India.
“The programme is in line with Oyo’s strategic focus for 2025 for the India market, which aims to drive profitability by enhancing the overall guest experience,” said Varun Jain, chief operating officer, Oyo. “These hotels record a higher customer rating of 4.6, compared to the overall average of 4.0. The occupancy rate of these hotels is also 2.7 times higher than other hotels.”
Introduced in FY23, company-serviced hotels contributed less than 2% to booking revenue at that time. In two years, this share has expanded more than tenfold, making it the company’s fastest-growing business segment globally, Oyo said in a statement.
Following a reduction in general and administrative spend and marketing costs, Oyo reported its first-ever net profit at Rs 229 crore in FY24, on the back of eight consecutive quarters of positive adjusted Ebitda. Oyo is expected to report a net profit of Rs 1,100 crore in FY26, according to the profit projections shared by the company’s founder Ritesh Agarwal.