Oyo’s US business has stated that it has outperformed the budget hotel category in terms of RevPAR growth, with an 18% rise in 2022 compared to 2019. According to STR reports, the budget hotel segment improved by 6% in the U.S.
Oyo, the India-based hotel chain firm, said domestic tourism drove the improvement in its hotels in the U.S., with leisure and business travel leading the way.
“After two years of travel constraints, the U.S. government easing restrictions in summer 2022 has played an important role in opening domestic travel in the country and paving the way to creating newer tourist pockets across the country,” said Oyo International CEO Gautam Swaroop.
In markets where Oyo has a considerable presence — Miami, Phoenix and Houston markets — the company said it recorded significant growth.
According to the STR Miami submarket report, the budget segment RevPAR increased by 21% in 2022 compared to 2019. RevPAR in Oyo’s properties in the region posted a 21% increase in 2022 compared to 2019, indicating a ~1.3x higher growth than other budget hotels in the region. Overall, the submarket experienced a change in demand with most bookings originating from domestic tourists.
In Houston, Oyo’s RevPAR jumped 13% while the budget hotel segment increased by only 0.16% growth in RevPAR, showing STR’s submarket analysis. Given the market’s proximity to the oil and gas hub, Oyo attributed this surge in demand to the rise in business travel.
Overall RevPAR in Phoenix improved by 32% in 2022 compared to 2019, while Oyo’s RevPAR surged by 41%, ~1.3x higher than industry RevPAR.
Oyo U.S. recently announced that its RevPAR has increased by 46% since the start of COVID-19 in 2020, with the best performance at 64% during the peak season of June, July, and August compared to the same period in 2020. Coastal Oregon, Miami, Myrtle Beach, Houston, and San Antonio were named the top U.S. destinations for RevPAR in 2022.
Oyo said earlier this year that revenue in 2022-23 would be $751 million, up 19% from $629 million in FY22. In addition, the hotel chain hopes to make progress toward its first “full fiscal year of EBITDA profitability.”