Published on : Saturday, April 6, 2019
Details, like the financial investment offered into the joint venture company, Oyo Hotels Japan, were not made public.
The new joint venture is hard on the heels of the recent partnership of OYO with Yahoo Japan, which will bring, particularly, its home-rental model Oyo Living to Japan.
The recent agreement will aim on expanding Oyo Hotels, world’s fastest-growing budget accommodation brand that has turned its founder Ritesh Agarwal into something of a “one to watch” in the hospitality sector of the world.
Expansion details, like the number of budget hotels and rooms it hopes to have in Japan, were also not provides at press time. Oyo has selected Prasun Choudhary, an Oyo founding member who has successfully executed many global Oyo businesses, as operating partner to lead the venture.
“I think there’s room for them in the Japanese market,” said Kei Shibata, CEO of Venture Republic in Tokyo, a company that manages a group of online travel websites, including Line Travel jp, a leading travel metasearch in Japan.
“As the inbound tourism is growing significantly in Japan, more tourists would come from many countries, including those in Asia, who often look for an affordable accommodation.”
“Since private accommodation was regulated, there is an extra demand for affordable hotels now. The hospitality industry in Japan is far from consolidated, i.e., there are many small independent properties, including ryokans, around that are struggling with operational efficiencies. This is where Oyo can find their value as well.”
However, the size of the unbranded budget accommodation market in Japan is hard to come by.
What’s more, a deteriorating staff shortage in the middle of a large impending supply of rooms may act as a factor to improve Oyo’s model of renovating an asset and using technologies to reduce the cost of labor, operations, distribution, and marketing.