India’s Oyo Hotels continues rapid growth, acquires Vegas Hooters in $135M deal
Hooters Casino Las Vegas – soon to be relaunched as Oyo Hotel & Casino Las Vegas
Hooters Casino Hotel Las Vegas marks the fast-growing Indian hotel group’s first property acquisition in the United States.
Oyo Hotels and Homes continues its astoundingly rapid growth.
The Indian budget hotel company is doing so by acquiring its first property within the United States: the Hooters Casino Hotel Las Vegas.
The deal for the property was completed as part of a partnership with hotel investment and management company Highgate and is valued at roughly $135 million, according to a report in the Wall Street Journal.
Oyo Hotels expects solid growth in the USA
The newest property in the company’s portfolio is a massive 657-room hotel, which will ultimately be renamed Oyo Hotel & Casino Las Vegas.
Before that happens, however, renovations must be completed later this year. Oyo’s CEO Ritesh Agarwal has called this move “critical” to the budget hotel chain’s U.S. expansion strategy.
This is likely the start of a trend. Oyo, it should be noted, currently has more available rooms in its China properties than it does in its home market of India, and the U.S. is expected to go that way soon.
Oyo builds its footprint
Back in June, Oyo committed $300 million toward building a footprint in major U.S. cities, including New York, San Francisco, and Los Angeles.
As a result, Oyo currently has 112 hotels available to customers in 21 states, up from 50 hotels in 15 states at the beginning of last month.
“With our newest hotel in Las Vegas, we are excited to cater to a completely different audience segment and are certain this will be the perfect start to Oyo’s journey in Las Vegas,” said Agarwal, in a statement.
Oyo’s 35,000 square-foot flagship casino will be one of the chain’s growing upscale lodging options, offering guests two restaurants, four bars, a fitness centre and outdoor pool — a far cry from typical motel accommodations.
A solid strategy for ongoing expansion
Some are sceptical about how the company will make a low-cost hotel business model work in the United States.
But Oyo is still confident it will be the cheapest lodging option for travellers there, based on its dynamic pricing strategy.
Oyo’s rapid expansion in the U.S. has so far happened through consulting and revenue management agreements, where the start-up’s investors, including SoftBank and Sequoia Capital, supply funds for renovations to owners in return for fees paid to Oyo.
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