Budget hotel operator and aggregator Oyo has made its entry into the premium resorts and hotels category with the launch of its new brand, Palette. Oyo plans to have a total of 50 properties by the second quarter of 2024.
The company has started 10 Palette resorts on a pilot basis in cities like Jaipur, Hyderabad, Digha, Mumbai, Chennai, Manesar and Bangalore. It will add 40 more Palette resorts to its portfolio by the second quarter of the current fiscal. The expansion will encompass destinations like Delhi-NCR, Kolkata, Amritsar, Shimla, Goa, Udaipur, Pune, Mussoorie, Srinagar and Kochi.
The move is part of Oyo’s efforts to make its premium property portfolio more versatile. “Palette resorts will be strategically located in popular leisure destinations across India, while also catering to business leisure or bleisure travelers looking for quick getaways and staycations,” Oyo said in a statement.
Oyo aims to increase its premium hotel footprint under brands such as Townhouse Oak, Oyo Townhouse, Collection O and Capital O in 2023. The company plans to add 1,800 new properties as part of its premiumization by the end of 2023.
Owing to the rise of middle-class and higher disposable income, luxury hotels and resorts segment is witnessing an unprecedented growth in India, Oyo said. Urban millennials and GenZ are seeking more authentic and unique experiences, and don’t mind spending extra to attain them, it added.
A recent Ficci report said the Indian luxury hospitality market is projected to grow at an annual growth rate of 12.8 per cent between 2015 and 2025. The pan-India premium hotel occupancy will witness a decadal high of 70-72 per cent in FY24, according to an Icra report.
In April, Oyo said that it turned cash flow positive during the fourth quarter of FY23 with nearly Rs 90 crore surplus cash flow.
In March, Oyo refiled its draft red herring prospectus (DRHP) with the Securities and Exchange Board of India under the pre-filing route. The firm had originally 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.
In the run-up to its IPO, Oyo also trimmed down its employee count last year in December, firing 600 of its 3,700-strong workforce as it shut down a few products. At that time, Oyo that the downsizing had hit product and engineering teams, corporate headquarter and the vacation homes teams.
