Mumbai: Budget hotel startup Oyo (Oravel Stays Pvt. Ltd) has cut its estimated net loss to a tenth of its overall sales in 2018-19 even as it continued to focus on expanding in India and South Asia, said Aditya Ghosh, the company’s chief executive officer.
However, in value terms, the company’s net loss is estimated to have risen to ₹511.8 crore during the year ended 31 March from ₹360 crore in 2017-18, Ghosh said at a news conference.
Ghosh, who recently took charge at Oyo after a 10-year-stint at India’s largest airline IndiGo (InterGlobe Aviation Ltd), said the company has more than halved its net loss from 45% of overall sales to 20% in 2017-18 and plans to bring it down further.
He also pointed out that the company plans to relaunch and reposition most of its existing hotel brands as it continues to expand its business across South Asia.
“We have halved the net loss in the previous financial year. If this trajectory continues, in the not so distant future, we will be profitable. But our guidance is that we should be down to 10% (2018-19)," Ghosh said.
The five-year-old startup, which on Monday received $200 million funding from home sharing platform Airbnb Inc. as part of its Series E funding round, has been on an expansion spree, entering China and Japan in the past one year.
With six brands, including Oyo Rooms, Townhouse and Palette Resorts, the hospitality company, which is considered India’s third-most valuable startup, is present across 259 cities with around 173,000 hotel rooms in India.
“We now plan to reposition and relaunch our brands and make it better by adding more features and up the game on each one of these brands," Ghosh said, adding that the company has relaunched its “Collection O brand" with added features.
On Tuesday, Oyo also announced its plan to scale up its corporate and executive hotel brand SilverKey to 400 hotels by 2019-end from the existing 19. So far, Oyo has invested around ₹1,400 crore on expanding its business in India and South Asia.
“We are the sixth largest hotel company globally in terms of the number of total rooms. Our aim is to create a truly global brand," Ghosh said.
Last year, Oyo raised around $800 million from Japan’s SoftBank Group Corp. as part of its Series E funding, which was followed by infusions from Chinese ride-hailing giant Didi Chuxing and Asian ride-hailing giant Grab. This round valued the company at around $5 billion.