OYO ASSETS

OYO Assets: Redefining Hospitality through Strategic Property Investments

In the evolving landscape of global travel, Oravel Stays Limited (OYO) has established itself as a world-leading digital hotel company, operating in over 35 countries with more than 132 million downloads [1]. While OYO is widely recognized for its tech-enabled platform that maximizes digital demand, a significant strategic shift is occurring through OYO Assets (Sunday Proptech Limited) [1, 2].

This new venture marks a move toward strategic property investments, designed to complement OYO's existing asset-light model with high-yield, real asset-backed stability [1, 3].

### The Strategy: High-Potential Asset Ownership

OYO Assets functions as a joint venture between Oravel Stays Limited and its key existing shareholders [2]. The core mission is to acquire high-potential hotels to generate high yields and create long-term value [3]. By keeping OYO Assets as a separate entity, the organization maintains a clear distinction between its asset-light brand operations and its asset-ownership platform [2].

The competitive advantage of this model lies in OYO's leading distribution strength and its proprietary technology stack, which allows for the lowest cost structure and market-leading Revenue Per Available Room (RevPar) [3]. This technology provides full-stack solutions for hotel operations, including pricing, marketing, and revenue management [4].

### A Global Portfolio: From the USA to India

Currently, OYO Assets owns 8 hotels, with aggressive plans to acquire 8 more [3, 5]. The portfolio is strategically split between high-growth markets:

* United States: The current portfolio includes 8 premium mid-stay properties in locations such as Shreveport Bossier City, Greenville, Cincinnati, and St. Louis [5-7]. These assets have shown strong performance, with several properties reporting EBITDA margins between 35% and 46% [7, 8].

* India: The company has identified 4 premium stay properties under the Sunday Hotel brand in Chandigarh, Jaipur, Ahmedabad, and Vadodara [6].

The typical structure involves OYO Assets owning the property and franchising it under brands like Sunday Hotels or Studio 6 [5].

### Benchmarking Success: Following Global Giants

The business model adopted by OYO Assets mirrors successful strategies used by global hospitality leaders [9]. For example:

* Marriott operates an asset-light brand model, while Ventive Hospitality focuses on asset-backed luxury ownership [9, 10].

* IHG maintains a franchise-heavy model, while SAMHI serves as an institutional hotel ownership platform in India [10, 11].

* IHCL (Taj Group) manages brands, while TajGVK owns the premium hotel assets [12].

By positioning itself as a leading hotel ownership platform, OYO Assets aims to capture valuation upside and recurring cash flows, similar to listed Indian platforms like Chalet Hotels and Samhi Hotels, which trade at significant EV/EBITDA multiples [2, 13, 14].

### Financial Outlook and Growth

The financial trajectory for OYO Assets is ambitious. The company projects its EBITDA to increase from approximately ₹25 Cr. in FY26 to ₹93 Cr. in FY27, driven primarily by supply growth and property acquisitions [8].

This growth is supported by an experienced leadership team, including Founder & Chairperson Ritesh Agarwal, Group CFO Rakesh Kumar, and Saurav Agarwal, who leads Sunday Proptech [15, 16].

### Why OYO Assets Stands Out

1. High Yield Acquisition Strategy: The company focuses on acquiring undervalued hotels and upgrading them to premium brands, delivering superior yields compared to new "greenfield" developments [17].

2. Tech-Led Turnaround: By utilizing OYO’s tech stack, properties can see a rapid boost in occupancy and revenue, matching the cash flows of industry peers on a much faster timeline [17].

3. Strategic Locations: The focus remains on high-RevPAR markets with favorable cap rates to drive the strongest possible upside for investors [17].

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Analogy for Better Understanding:

Think of OYO Assets as a master mechanic who buys classic, underperforming cars. While the parent company (OYO) provides the high-tech fuel and the GPS (the technology and distribution), OYO Assets actually owns the car itself. By fixing the engine and giving it a premium paint job (upgrading the brand), they ensure the vehicle runs more efficiently and is worth far more than when they started.