The app-based lodging revolution that is Airbnb has made a giant step internationally by investing in India’s biggest hotel chain, OYO. This opportunity would expand Airbnb’s reach in Asia making them worth more in value than ever.
According to CNN reporter Anshula Raj, Airbnb is in the initial phases of multiple funding rounds for OYO, a startup which has taken lodging in India by storm. Raj states “Neither Airbnb nor OYO would comment on the size of the investment, but it could be as much as $200 million.” To put it in context, OYO in 2018 was “valued at $5 billion.”
Airbnb recently stated that “markets like India and China are some of Airbnb’s fastest-growing, with our growth increasingly powered by tourism to and from these markets.” Greg Greeley, the president of Homes at Airbnb is excited for the future they have in India and greater Asia saying “OYO is empowering local hospitality entrepreneurs to provide more options to more travelers.”
The five-year-old OYO began humbly as a source to book a cheap hotel around popular tourist locations in India. Currently, OYO offers upwards of “460,000 rooms across eight counties including China, Malaysia, Indonesia and the United Kingdom.” Now, OYO has a shot at becoming “one of the top five hospitality chains in China.” The head of global strategy at OYO, Maninder Gulati, is also excited for the expanding opportunities that can come with increased investment. “Airbnb’s strong global footprints and access to local communities will open up new opportunities for OYO…to strengthen and grow.”
While Airbnb might be excited with its opportunities abroad, in the United States the app-service is facing opposition in numerous cities regarding health violations and hotel standards. Unlike a traditional hotel which has to abide by certain ordinances regarding health, sanitation, and customer safety, Airbnb allows users who rent out their property to bypass these rules entirely. Because of this, an issue has occurred in many urban communities where landlords have surged rent in order to push out tenants. After tenants have moved out, the landlords then make more in profit by listing the rooms on Airbnb. Currently, other app-based services such as Uber and Lyft are facing similar legal opposition regarding taxi laws and collective bargaining rights.
Time will tell if these policies and ordinances will follow Airbnb as they try to make their footprint larger in Asia.
Sources: CNN, TopNewsGazette.com