OYO revenue more than triples in FY18, loss stable

Budget hospitality chain OYO reported a three-fold rise in operating revenues amidst stagnant losses even as gross expenses rose nearly two-fold for the year through 31 March 2018, its filings with the Registrar of Companies state.

Gurugram-based Oravel Stays Pvt. Ltd, which operates the venture, reported operating revenues of Rs 415.78 crore during 2017-18, up from Rs 120.40 crore the previous year.

The company recognises operating revenues from commissions and service fees for hotel bookings. Besides, the consolidated revenues of OYO also include income generated by its subsidiaries in the UAE, Indonesia, Malaysia and Singapore, the filings revealed.

Separately, in a statement, the company attributed its revenue growth to strong underlying business that includes exclusive room supply, a two-fold increase in stayed room nights and consistent margin expansion.

“More than 93% of OYO’s demand comes through its own channels signifying low dependence on third-party online travel agents (OTAs). Repeat customers for OYO generated 73% of revenue in Q4 2018 (Oct-Dec) bringing in an industry leading metric,” the statement said.

Net losses marginally widened to Rs 360.43 crore, up from the Rs 355.30 crore netted during the previous year.

Gross expenditures rose 67% at Rs 838.41 crore, up from Rs 501.64 crore the previous year. Other expenses, which stood at Rs 541.95 crore, accounted for nearly 65% of the total expenses. Within ‘other expenses’, miscellaneous expenses were Rs 221.07 crore and accounted for a little over 50% of this head. Miscellaneous expenses, among others, included lease rental costs (Rs 92.36 crore), customer support costs (Rs 37.13 crore) and loss from bookings (Rs 19.44 crore).

Other major expense heads include employee benefit expenses (Rs 267.74 crore) and advertising and promotional expenses (Rs 99.13 crore) among others.

OYO, which is the most funded player in the Indian budget hospitality sector, is now present in over 500 cities across eight countries that include India, China, Malaysia, Nepal, the UK, the UAE, Indonesia and the Philippines.

The company claims to have hosted guests in over 13,000 franchised and leased hotels and in over 6,000 homes. Besides, it has over 4.5 lakh fully controlled leased and franchised keys as on December 2018 with a realised value run-rate of $1.8 billion, the statement added.

In India, OYO is present in over 180 cities and has more than 8,700 properties with over 170,000 rooms. The company, which has raised an estimated $2.3 billion in external funding, is backed by SoftBank, Sequoia India, Lightspeed India, Hero Enterprise and China Lodging Group among other investors.

In its most recent funding round, the company raised $100 million (Rs 732 crore then) from Singapore-based ride-hailing company Grab in December last year.

The Ritesh Agarwal-founded firm entered the unicorn club in September last year in a $1 billion round that was led by Japanese conglomerate SoftBank and drew participation from other existing investors.

Earlier this month, media reports stated that OYO was in advanced talks to acquire Delhi-based Innov8 to enter the co-working space.