OYO Hotels & Homes has announced a remarkable financial turnaround, reporting a net profit of Rs 158 crore for Q2 FY24. This marks a significant recovery from a loss of Rs 50 crore in the same quarter last year. The total profit for the first half of FY24 stands at Rs 291 crore, a substantial improvement from a loss of Rs 91 crore during the first half of FY23. The gross booking value for Q2 FY24 reached Rs 3,243 crore, reflecting a 17% year-over-year increase, while revenue for the quarter was reported at Rs 1,578 crore [9d2dde6b].
The announcement comes on the heels of OYO's recent acquisition of G6 Hospitality for $525 million, a strategic move aimed at enhancing its global presence and expanding its footprint in the budget hotel segment [92aabe71]. Ritesh Agarwal, the founder of OYO, emphasized the company's premiumisation strategy and its plans to venture into upscale markets, which he believes will further solidify OYO's position in the competitive hospitality landscape [9d2dde6b].
This acquisition includes nearly 1,500 Motel 6 and Studio 6 locations across the United States and Canada, and is expected to close in the fourth quarter of 2024. G6 Hospitality, under Blackstone's management, has transformed into a leading asset-light lodging company, generating approximately $1.7 billion in gross room revenues [92aabe71].
OYO's recent financial performance is indicative of its growth trajectory, bolstered by a successful fundraising round in 2024 that raised Rs 1,457 crore, valuing the company at $2.5 billion [9d2dde6b]. As OYO continues to expand, it aims to add 250 more hotels across 35 states in the U.S. by the end of 2024, further capitalizing on the recovery of the hospitality sector [92aabe71].
The U.S. hotel industry is currently facing challenges such as declining occupancy rates and stagnant room prices. However, analysts remain optimistic about the economy hotel segment's recovery, projecting improvements in 2025 due to increased federal infrastructure spending that could boost travel and tourism [0448f196]. OYO's strategic moves, including the acquisition of G6 Hospitality and its focus on premiumisation, position the company well to navigate these challenges and capitalize on emerging opportunities in the market [9d2dde6b].