OYO buys Hooters Casino Hotel in Las Vegas in first US purchase

 

Indian hospitality startup OYO has acquired the Hooters Casino Hotel in Las Vegas, its first US property purchase, for a reported £110m ( $135million). OYO said. OYO said it would partner with restaurant operator Highgate to rebrand it OYO Hotel and Casino. The hotel, which has 657 rooms across 19 floors and a 35, 000 square foot casino will continue to be managed by Highgate.

The hotel brand OYO has grown at a furious pace. OYO Rooms, which was founded in 2013,  by  25-year-old Ritesh Agrawal, is the world’s fastest-growing hotel chain. It launched in Britain less than a year ago and already has over 2100 hoteliers signed up as franchisees offering low priced city accommodation. Worldwide it has 23, 000 hotels and has become the biggest hotel company by number of rooms in India and China and by some estimates the fifth-largest in the world. It has raised over $1bn to fund expansion from investors including Japan’s SoftBank and Airbnb. OYO’s unexpected growth the involvement of SoftBank  and its application of technology has drawn comparisons with WeWork.

OYO’s business model works on the basis of approaching independent hotel owners and offering them help to improve occupancy and income with access to its central booking system in return for a cut of the proceeds. Owners must spice up the hotel improve standards for cleanliness and provide internet access. They must also submit to OYO branding ( its red logo reminiscent of OXO cubes).

Last month Agrawal led a share buyback in the company from some early investors. According to reports OYO is valued at $10bn and led to Agrawal’s stake rising from 10 per cent to 30 per cent, SoftBank owns 48 per cent.

Agrawal grew up in Odhisha ( formerly Orissa) state in eastern India where his parents ran a grocery store. He started OYO after dropping out of university in Mumbai and identified the niche in the market for better budget accommodation while travelling around India. The first OYO was opened in Gurgaon, a satellite city of New Delhi. Agrawal then joined  a fellowship programme launched by the PayPal co-founder Peter Thiel. The scheme nurtures young entrepreneurs and awards them $100, 000 and Agrawal was the first one from Asia to receive the prize and put OYO on hold while in California.

A weekday night in OYO in Victoria costs less than £70 if booked direct and in advance, nearby Travel Lodge costs the same but does not include Wi-Fi. Premier Inn is £40 more expensive.