At the end of August, India-based company OYO Hotels & Homes bought the Hooters Hotel near the Las Vegas Strip.
The company, run by 25-year-old CEO and founder Ritesh Agarwal, began operations in 2013 and claims to be the fastest-growing chain of affiliated hotels, homes, managed living and workspaces in the world, with 23,000 hotels and 125,000 vacation homes spread across 80 countries.
In all, the company plans to invest about $20 million in renovations to the Hooters Hotel. Agarwal told the Review-Journal that this is just one of the first steps in the company’s plan to expand in the U.S.
This interview has been edited for length and clarity.
Why did you decide to enter the hospitality industry? Was it challenging to enter the industry so young?
While I was between school and university, I was traveling on a shoestring budget and had to lodge in some not-so-great guest houses, and I realized that I was looking at the wrong end of the rope. The problem wasn’t the lack of availability of budget hospitality options; it was that the majority of midmarket and economy hotels lacked the minimum baseline standards of quality and service delivery.
In the initial days, convincing hotel owners to associate with OYO was a herculean task. Being a completely new, untested business model, hotel owners were skeptical about the value and prospects we offered. Soon, they started seeing repeat customers and greater revenues. They also noticed how hotel operations, revenue management and customer relationship management became more efficient and convenient via OYO apps, and were then convinced.
What’s OYO’s business strategy?
We invest in the asset alongside the asset partners and provide free design and consulting to upgrade the infrastructure and design of the hotels.
We manage the operations for the real estate owner, and empower more than 23,000 real estate owners worldwide, giving them the ability to get a higher return on investments, access easy financing opportunities, transform their hotels and offer good quality customer service, thereby significantly increasing occupancy and profitability.
Our focus on design-driven online conversion leads to better reviews and therefore higher business. Our deep renovation capabilities have empowered us to add up to 80,000 exclusive keys to our chain every month at a global level. With this, we have set a new benchmark in transforming and renovating assets in a record time of 14 to 30 days — a stark contrast to the industry standard of up to 90 days.
What are OYO’s plans for expansion in the U.S.?
Earlier this year, we announced our plan to invest $300 million in the U.S. We believe it is still “day zero” for us in the U.S. and we have a lot to learn and a huge opportunity ahead of us.
The company’s ability to win customers by introducing its popular concept of “comfort design” and deliver value chic hospitality experiences at hard-to-ignore prices makes it possible for us to continue to grow at a scorching pace. In a short span, we have surpassed the scale of traditional and established hotel chain brands in the world, and the U.S will be key to OYO’s next wave of growth.
Does your company plan to purchase more Las Vegas properties?
At the moment, we are focused on getting this property live. The renovation work is still underway, and we should be able to formally open the doors to OYO Hotel & Casino Las Vegas by the end of the year. At OYO, we never say never, so stay tuned.
Why did the company decide to keep the Hooters restaurant at the property?
It is a popular restaurant and also one of the largest-grossing Hooters franchise restaurants. So we are excited to continue having this restaurant at the property.
What is the target demographic for the Las Vegas property?
With this hotel, we will continue to focus on bringing to life our popular concept of “comfort design” and delivering chic hospitality experiences. We are increasingly exploring new ways to connect with our customers, from millennials to young executives and families, in every city we enter, and through this hotel as well we will look at catering to this wide audience base.
We will look at amenities that will work best keeping in mind the needs of our customers. This will include upgrading some of the existing amenities like food and beverage options — like the largest-grossing Hooters franchise restaurant, the largest Steak ’n Shake in the U.S. — the poolside bar, the 24-hour gym, gaming at the casino and free parking, all of which makes it convenient for guests and city dwellers.
An OYO spokesperson said earlier this year that the company wants to become the world’s largest hotel chain by 2023. How do you plan to accomplish this?
I think if we continue to focus on our core mission, that will happen. But to be honest, I don’t worry about being the “largest” or “fastest growing.” I am completely focused on our mission, the fact that we have the opportunity to make travel and hospitality a reality for 3.2 billion middle-income people around the world.
Operating in multiple geographies and bringing a consistent product is both exciting and challenging. Today there are OYO customers who actively stay with us in almost all the countries we have opened. We respect each market is unique in its own way, so we localize the product experience and interiors of our buildings, and our overall approach.