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Budget hotel chain Oyo is aiming for a significant profit jump and continued revenue growth in the current financial year, signaling a potential turnaround for the company.
According to sources familiar with internal discussions, Oyo's parent company Oravel Stays is targeting an INR 100 crore profit after tax (PAT) for the fourth quarter (Q4) of FY24. This would mark a three-fold increase in profits compared to the previous quarter, which saw a PAT of around INR 230 crore. The company is also aiming for a 20% year-on-year revenue growth, translating to a potential increase of over INR 2,000 crore compared to FY23.
Following Oyo's achievement of net profitability in the second quarter of FY24, the company has sustained its positive trajectory, with profits doubling from INR 216 crore in Q2 to INR 230 crore in Q3. This turnaround is credited to increased revenue and enhanced user trust in the brand.
Oyo's growth strategy is comprehensive. The company is actively expanding its platform by adding new hotels and homes, aiming to onboard over 10,000 establishments in the calendar year 2023. This strategy targets a rising demand segment and broadens Oyo's presence in the budget hospitality market.
Furthermore, Oyo is prioritising international expansion, with a particular focus on four key regions: India, Europe, Indonesia, and Malaysia. The company is actively expanding its presence in popular tourist destinations like Bali, Indonesia.
Oyo's recent initiatives extend beyond traditional hotel chains. The company launched the Oyo Accelerator Programme in March 2023, specifically designed to support over 700 hotels and 85 small and first-generation hoteliers across India. This program, backed by a recent INR 2,200 crore credit line from JP Morgan, provides resources and guidance to help them build and grow their businesses.
Recognising the growing trend of spiritual tourism, Oyo is upping its presence in pilgrimage destinations. The company recently opened 65 properties in Ayodhya and plans to add 50 homestays in Puri, Odisha. This focus on spiritual tourism caters to a specific segment of travellers and offers unique accommodation options.
With a focus on profitability, strategic expansion, and catering to emerging travel trends, Oyo is poised for a strong year in 2024.
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