The SoftBank-backed Oravel Stays, which runs budget hotel aggrgrator service under OYO Rooms, has posted a 24-fold jump in losses to Rs 496 crore for the period ended March 2016, according to regulatory filings with the Registrar of Companies (RoC).
The SoftBank-backed Oravel Stays, which runs budget hotel aggrgrator service under OYO Rooms, has posted a 24-fold jump in losses to Rs 496 crore for the period ended March 2016, according to regulatory filings with the Registrar of Companies (RoC) and data platform Tofler. The company posted losses of Rs 21 crore in FY15. Revenues too increased by 14 times to Rs 32.8 crore in 2015-16 from Rs 2.4 crore in 2014-15. The rise in losses is largely due to the increase in employee benefit expenses which rose 12-fold to Rs 121 crore in 2015-16 from Rs 9.9 crore in 2014-15. Other expenses also jumped 19 times to Rs 391 crore in 2015-16 from Rs 21 crore in 2014-15.
In in its official blog post, the company said in 2016-17, its expects a further drop in its losses to Rs 325 crore. The company further said currently gross booking value (GBV) stood at $400 million, as it claims to have clocked more than 15 million booked room nights annually. The company further added, “In the quarter ended June 2017 we witnessed our highest grossing months with total booking value closing just shy of $100 million, setting higher watermarks for ourselves. Net of cancellations, our average daily realized rooms nights have grown 30% quarter-on-quarer and 1.7x Y-o-Y.”
In September last year, FE had reported that OYO Rooms was clocking losses of Rs 47 crore per month since January 2016. The business was back then reporting revenues of Rs 19.2 crore per month. However, it has been optimistic of turning profitable in 18-24 months after it strengthens its brand. For this, the company has tweaked its business model last year. “We no longer buy inventory and pay a minimum guarantee to hotels. We reworked our business model last year, where we decided to phase out the inventory we held,” said Abhinav Sinha, COO, OYO Rooms, in an interview to FE.
Sinha said on an average, the start-up clocked 7-8 lakh bookings per month, with an average ticket size of Rs 1,400-1,500. The company earns a 20% commission on each booking.