OYO inks MoUs with State Bank of India, Bank of Baroda for financial support to its hotel partners
The MoUs will also allow OYO to help in the creation of thousands of jobs in tier II and III cities by nurturing micro-entrepreneurs in the hospitality sector, the company said
New Delhi: Hospitality firm OYO today said it has inked a memorandum of understandings (MoUs) with the State Bank of India and Bank of Baroda for extending financial support to the company's hotel partners.
Signed under the aegis of the Pradhan Mantri Mudra Yojna, the MoUs will enable financial support for the company's existing and potential hotel partners for fuelling transformation and standardisation at their properties, OYO said in a statement.
"These MoUs will help us in shortening the demand-supply gap of quality accommodation by offering hoteliers a platform to transform their property and enhance the business by creating beautiful living spaces," OYO Fintech SVP Jayant Chauhan said.
In the past, partner hotels have witnessed an increase in revenue and occupancy levels after becoming a part of OYO’s chain of hotels. On average, in business cities, the company has been delivering 80 percent plus occupancy, the company said in a statement.
As a step towards enabling convenient financing and collateral-free loans for its asset partners through banks and NBFCs, OYO has also established an in-house Fintech division. These loans will help individuals hailing from Tier II and III cities to be self-employed and run their own budget assets with OYO’s diverse brand portfolio allowing them to become a partner through OYO Home (two rooms and above) or OYO Rooms under franchise or manchise model.
The company is further utilising machine learning models and data analytics in this process and all these facets will come together to strengthen the country’s micro-entrepreneurship ecosystem.
As a category, over the years, budget hotels have been overlooked as the preferred accommodation option. This may have been due to smaller ticket values, lack of predictable, standardised services or a lesser attraction for not-so-known brands. Nonetheless, this niche caters to one of the biggest travel segments in India, offering a tremendous market opportunity, of which only about 2% has been tapped so far.
"Since hospitality is in a transformational phase as technology and innovations are driving new business practices, there is much scope for budget hotels to expand further," Chauhan said.
The MoUs will also allow OYO to help in the creation of thousands of jobs in tier II and III cities by nurturing micro-entrepreneurs in the hospitality sector, the company said. With a diverse portfolio - OYO Rooms in the budget segment and OYO Townhouse, OYO Home and SilverKey in the mid-market category - the chain caters to an array of travellers.
OYO currently operates in more than 160 cities across India, China, Malaysia and Nepal.
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