Author: Courtney Goldsmith
2 May 2019
Oyo, India’s fastest-growing hotel chain, has agreed to buy Amsterdam-based rental firm @Leisure from Germany’s Axel Springer for €369.5m.
Oyo is hoping to become a global real estate brand
The deal, agreed on May 1, will expand the company’s reach into Europe and boost its presence in the short-term rental market.
“We see vacation homes as a unique opportunity with 115,000 units of homes now getting added to our already growing count of beautiful homes,” Ritesh Agarwal, Founder and CEO of Oyo, said in a statement.
“@Leisure Group has proven capabilities in helping develop Europe into a vacation rentals hotspot,” he said.
The deal marks Oyo’s first big international takeover since Agarwal launched the company in 2013 to transform India’s fragmented and legacy-driven budget hotels industry.
Now worth around $5bn (€4.46bn), Oyo is hoping to become a global real estate brand. The firm has been lauded for its stunning growth over the past six years, having gained backing from home-sharing giant Airbnb and Japan’s Softbank. It now claims to be the world’s sixth-largest chain of hotels, homes and living spaces. Its growing network already spans 10 countries, including Japan, China and Malaysia, with more than 18,000 franchised and leased hotels.
The acquisition of @Leisure will give Oyo access to the company’s 30,000 fully managed holiday homes, which it owns through brands such as Belvilla, DanCenter and Danland. Oyo will also control the firm’s subscription-based home management service, which includes more than 85,000 homes across 50 countries.
According to a report by the BBC, Maninder Gulati, Oyo’s Global Chief Strategy Officer, said Europe is “spearheading the vacation and urban home rental trend globally”. @Leisure said the European market accounted for 30 percent to 40 percent of the total supply of such homes.
But this sector still has further room for growth: a 2017 report by lockmaker Assa Abloy said Europe’s holiday rentals market would be worth €32.5bn by 2023, up from €23.28bn in 2016, in terms of revenue.
Gulati added: “Through this acquisition, the size and scale of the opportunity can be immediately unlocked for Oyo’s homes business.”
As Oyo aims to become a globally recognised hotel and property brand, its expansion into Europe is a vital step towards achieving that goal.