IPO-bound hotel aggregator OYO plans to expand its market presence in the US with an addition of over 100 hotels in CY2023, owing to higher demand in the geography.

Ritesh Agarwal, founder & CEO of OYO Rooms, tweeted on Friday that although the Covid-19 pandemic slowed down its growth in the US market in CY2020 and CY2021, CY2022 was apparently its ‘best year’ with a 23% growth in new hotels added to its portfolio when compared to the previous years.

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“The hospitality industry in the US has a massive trust deficit and as a relatively new player, we had our fair share of challenges… Our teams doubled down on solutions & products for hotel owners and over 35% of our new hotels came from recommendations or referrals by our existing hotel owners,” Agarwal added in his tweet.

He further pointed out that in terms of scale and size for the tourism and hospitality industry, the US saw one of the highest shares of global tourism spending at nearly 15%. To cater to this growing demand, OYO plans to add over 100 hotels across the states of Oregon, Washington, Texas, Oklahoma, Georgia and Florida.

“In 2022 alone, over 130 million domestic and international tourists visited Florida, an all-time record. That’s over 50% of the US population… Our revenues per room are 3X higher than the industry in most locations and nearly 41% of bookings happen directly on our app/website,” said Agarwal.

OYO’s planned expansion into US geography comes shortly after the company revived its potential IPO plans. It had recently refiled its draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (Sebi) under the confidential pre-filing route. OYO’s new DRHP will give the company more leeway on the timing of the listing as well as on fine-tuning the issue size, based on market conditions, to around $400 million-$600 million, all of which will now be a primary issuance, to repay most of its debt, sources said. The company expects the issue timing to be around Diwali, pending Sebi approval.

OYO’s previous submission to Sebi in November 2022 was an updated financial report for the first half of the 2022-2023 financial year, which showed significant improvements in the company’s performance since its initial IPO application in September 2021. The updated report showed a bounce-back in topline, a sustained increase in gross margins and an overall reduction in losses.

OYO reported its first positive adjusted Ebitda of Rs 63 crore, a 24% year-on-year increase in revenue, and a 69% increase in monthly booking value (GBV per month) for its hotels in H1FY23.

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OYO had filed preliminary documents with Sebi in September 2021 for a Rs 8,430-crore IPO, including a fresh issue of equity shares aggregating up to Rs 7,000 crore and an offer for sale of Rs 1,430 crore. The company recently announced that it plans to double the number of premium hotels in India in 2023 by adding approximately 1,800 premium hotels. OYO’s focus on premium hotels started in the last quarter of 2022, when it added more than 400 new premium hotels between October and December.

The company also launched an accelerator programme for first-generation hoteliers with more than five operational hotels on its platform.