OYO

Timeline

1. 2012Ritesh Agarwal launches Oravel Stays, a budget accommodation listing and booking website.
2. 2013Oravel Stays is renamed OYO and the company starts standardising unbranded budget hotels instead of only listing them.
3. 2013Agarwal receives a 100,000 dollar grant as a Thiel Fellow, the programme run by PayPal co-founder Peter Thiel.
4. 2015OYO signs a term sheet to acquire Zostel's Zo Rooms in an all-stock deal that would give Zostel's founders and investors a 7 per cent stake.The deal later collapsed into a long arbitration
5. 2016The team behind Qlik Pass is acquired to build the company's data science department.
6. 2018OYO acquires Chennai based Novascotia Boutique Homes to enter serviced apartments and executive stays.
7. 2018Weddingz.in, a Mumbai based marketplace for wedding venues and vendors, is acquired.
8. 2018The company raises 1 billion dollars, with the first 100 million dollars filing made in February 2019.
9. 2019OYO announces a 1,400 crore rupee investment in its India and South Asia business and launches Collection O.
10. 2019A global distribution partnership with Hotelbeds is announced in April.
11. 2019The Amsterdam based @Leisure Group is acquired for 415 million dollars, taking OYO into European vacation rentals.
12. 2019The Hooters Casino Hotel near the Las Vegas Strip is bought with Highgate for 135 million dollars, the company's first major United States investment.
13. 2019Ritesh Agarwal buys back shares through RA Hospitality Holdings in a 2 billion dollar deal, lifting his stake to about 30 per cent at a 10 billion dollar valuation.
14. 2019OYO reports more than 17,000 employees globally and sets up 26 hospitality training institutes across India.
15. 2021An arbitration tribunal rules that the 2015 Zostel term sheet was binding and that Zostel is entitled to execute the agreements.
16. 2021OYO closes a 660 million dollar debt round and signs a multi-year strategic deal with Microsoft.
17. 2021The company files a draft red herring prospectus with SEBI to raise 1.2 billion dollars through an initial public offering.
18. 2022The Delhi High Court rejects Zostel's appeal for a 7 per cent stake in OYO.
19. 2022Croatia based vacation rental manager Direct Booker is acquired in a deal valuing it at about 5.5 million dollars.
20. 2024The company raises between 100 and 125 million dollars in a round that values it at about 2.5 billion dollars, down more than 70 per cent from 2019.
21. 2024G6 Hospitality, the parent of Motel 6 and Studio 6, is acquired from Blackstone for 525 million dollars.
22. 2026The former OYO Las Vegas property is listed on booking sites as Palette Las Vegas while still trading under the OYO name.

What it does

OYO Rooms is a hospitality company that takes unbranded budget hotels, homes and guest houses and brings them onto one platform under a set of standard brands. The company was founded in 2012 by Ritesh Agarwal and is headquartered in Gurugram, Haryana. As of January 2020 it said it had more than 43,000 properties and 1 million rooms across 800 cities in 80 countries, which made it one of the largest hotel networks in the world by room count.^[1]

The original insight was that India had a huge supply of small hotels that no traveller would book online because quality was unknown and unpredictable. OYO's answer was to sign those properties up, apply a minimum standard of rooms, linen and service, put them on one app and back the promise with a brand. Guests did not need to know the hotel; they only needed to trust the sign.^[1][2]

The company works through a mixture of leases and franchise style arrangements. In many cases it takes a property on lease, invests in refurbishment and hires a general manager to run it, which means OYO carries the rent whether or not the rooms sell. In others it supplies branding, technology and demand to an owner who keeps the property and pays a share of revenue.^[1][5]

Revenue comes from the difference between what guests pay and what it costs to run the property, plus fees from partners. The model is capital hungry because the company often funds the upgrade of a hotel before it earns anything back, which is why it raised so much money between 2015 and 2019 and why the collapse in its valuation after 2019 mattered so much.^[1][2]

India and South Asia

India is the market OYO was built for and still the one that defines it. The company's proposition was aimed at a specific gap: a country with tens of thousands of small hotels that no online travel agency would list because their quality could not be vouched for. OYO signed those properties up, imposed a minimum standard on rooms, linen and service, put them on one application and sold them under a brand a traveller could trust without knowing the property behind it.^[1][2]

The domestic push was funded deliberately. In March 2019 the company announced a 1,400 crore rupee investment in its India and South Asia business and used the money to launch Collection O, a format aimed at younger travellers who wanted a predictable room at a low price.^[1][6][12] In the same period it said it would scale SilverKey, the brand for corporate travellers, to 19 cities across India, which put it into competition for the accounts that companies book for employees on the road.^[15]

Employment and training were part of the same plan. OYO said in 2019 that it had created more than 1 lakh direct and indirect jobs in India, counting the staff it hired and the people employed in the properties it branded, and it set up 26 hospitality training institutes across the country plus a campus in Gurgaon with plans for a skill training centre attached to it.^[7][8][11] The reasoning was straightforward: a chain that promises the same experience in every city needs staff trained in the same methods, and the general managers who run individual OYO properties are the people who deliver that promise.^[1]

The Indian business is also where the company's difficulties are most visible, because the disputes with hotel owners are concentrated here. Partners who signed up during the expansion years complained that commission and revenue sharing terms left them with little margin, that minimum guarantee arrangements were altered after signing, and that the company's own pricing undercut the rates they could get on other channels.^[1] When the market tightened, the shift towards managing properties for owners instead of leasing them became a way of converting a fixed rent obligation into a fee that only exists when a room sells.^[1]

History

The company started in 2012 as Oravel Stays, a website that listed budget accommodation the way other portals listed hotels. Ritesh Agarwal, who had been travelling across India and staying in budget guest houses, found that the websites could tell him a room existed but not whether it was clean or safe. He was accepted into the Thiel Fellowship, the two-year programme set up by PayPal co-founder Peter Thiel, and received a 100,000 dollar grant that funded the early business. In 2013 Oravel Stays was renamed OYO and the company changed from listing hotels to standardising them.^[1][2]

Growth through the middle of the decade was about adding rooms. OYO signed up small hotels in city after city, gave them the OYO identity, and pushed bookings through its own app. By 2018 the company had become a household name in Indian travel, and the year also brought its first moves into adjacent businesses: Novascotia Boutique Homes in Chennai took it into serviced apartments and corporate stays, and Weddingz.in took it into the wedding venues market.^[1][3][9]

The year 2019 was the peak of the company's expansion. In March it announced a 1,400 crore rupee investment in its India and South Asia business and launched Collection O for younger travellers. In April it announced a global distribution partnership with Hotelbeds. In May it bought the Amsterdam based @Leisure Group for 415 million dollars. In July it acquired the New Delhi co-working business Innov8, and in August it bought the Hooters Casino Hotel near the Las Vegas Strip with the American real estate firm Highgate for 135 million dollars. In September it bought the Copenhagen data science firm Danamica for 10 million dollars.^[1][4][6][9][12][13]

The same year, Agarwal bought back shares from early investors through RA Hospitality Holdings in a deal worth 2 billion dollars, lifting his personal stake to about 30 per cent in a transaction that valued the company at 10 billion dollars. In October 2019 OYO raised a Series F round of 1.5 billion dollars led by SoftBank Group, Lightspeed Venture Partners and Sequoia India, which at the time looked like the prelude to a very large public offering.^[1]

The years after that were about survival rather than expansion. In July 2021 the company closed a 660 million dollar debt round to service existing loans, and in September 2021 signed a multi-year strategic deal with Microsoft. In October 2021 OYO filed its draft red herring prospectus with SEBI to raise 1.2 billion dollars, but the listing did not proceed on that timetable. In June 2024 the company raised a further 100 to 125 million dollars at a valuation of about 2.5 billion dollars, more than 70 per cent below the peak of 2019.^[1]

The most recent phase has been built on buying established brands rather than opening budget rooms. In December 2024 OYO completed the purchase of G6 Hospitality from Blackstone for 525 million dollars, acquiring the Motel 6 and Studio 6 chains and with them a large presence in the United States economy hotel market. The company had moved from creating a brand out of unbranded rooms in India to owning brands that already had decades of recognition abroad.^[1]

The expansion was never purely geographic. OYO also moved up and down the price ladder, from the budget rooms it started with to midscale Townhouse properties and upscale Palette resorts, and sideways into homes, co-working and wedding venues. Each of those moves was an attempt to use the same brand and booking infrastructure across a different kind of stay. Not all of them worked equally well: a guest house on the outskirts of a small town and a resort in the hills are sold to different people with different expectations, and the brand that reassured a budget traveller did not automatically transfer upwards.^[1][14][16]

The Zostel dispute

The longest running controversy in the company's history is its dispute with Zostel, the hostel chain whose budget rooms business it agreed to buy in 2015. The deal was structured as an all-stock transaction that would have given Zostel's founders and investors a combined 7 per cent stake in OYO. In February 2016 OYO's largest shareholder, SoftBank, told its investors that the acquisition was complete.^[1]

In October 2017 OYO said the deal had never closed, describing the term sheet as non-binding and saying it had expired in September 2016. Zostel disagreed, arguing that the term sheet was binding and that it had already transferred its business to OYO without receiving the shares it had been promised. The dispute went to the Supreme Court, which appointed the former Chief Justice of India A. M. Ahmadi as sole arbitrator.^[1]

In March 2021 the arbitrator ruled that the term sheet was binding and that Zostel was entitled to have the definitive agreements executed. In October 2021, as OYO prepared to list, Zostel wrote to SEBI asking the regulator to stay the offering on the grounds that the company's capital structure was not final. In February 2022 the Delhi High Court rejected Zostel's appeal for a 7 per cent stake. The case is the clearest example of the legal risk a fast consolidating company carries when it signs deals faster than it closes them.^[1]

Brands and formats

• OYO Townhouse, the company's midscale brand, aimed at travellers who want the reliability of a hotel at a price still below the premium chains.^[1][14]
• OYO Home, a home management business that offers private homes in different locations, fully managed by OYO.^[1]
• SilverKey, a brand focused on corporate travellers, which OYO said it would scale to 19 cities across India.^[1][15]
• Capital O, positioned for business travellers who want a mid-market room with predictable standards.^[1]
• Collection O, launched in 2019 with a 1,400 crore rupee investment, aimed at younger guests.^[1][6][12]
• Palette, the upscale leisure resort brand that took the company into higher priced holiday properties.^[1][16]
• OYO LIFE, the long-term rental brand for people who need furnished accommodation rather than a nightly room.^[1]
• OYO Vacation Homes, the division that holds the European holiday rental brands Belvilla, Danland, DanCenter and Traum-Ferienwohnungen.^[1]

OYO Vacation Homes and DanCenter

The European vacation rental business came to OYO through the 415 million dollar acquisition of the @Leisure Group in 2019. It sits inside a division called OYO Vacation Homes and covers holiday homes, cottages and resorts rather than city hotels, which makes it a different business from the budget rooms the company is known for.^[1][13]

The largest brand in the division is DanCenter, a vacation rental marketplace that lists more than 10,000 properties in Scandinavia and northern Germany. DanCenter also operates 28 holiday resorts in Denmark under the Danland brand and employs about 260 full time staff, of whom 65 work at its headquarters in Copenhagen. The company was founded in 1957 by Danmarks Turistrad, now VisitDenmark, as Dansk Centralkontor for Sommerhusudlejning. Its first chief executive, Kurt Holmsted, later bought the business through his company Land and Leisure, which was sold to @Leisure in 2016 and so passed to OYO three years later.^[1]

The division was extended in 2022 with the acquisition of Direct Booker, a Croatia based vacation rental management company, in a deal that valued it at about 5.5 million dollars. Vacation rentals matter to OYO because they smooth the seasonality of city hotels and because the properties are usually managed for owners rather than leased, which is a lighter balance sheet commitment than taking a hotel on rent.^[1]

The international push and retreat

OYO left India almost as soon as it had a repeatable formula. It moved into South Asian and Southeast Asian markets, into the Middle East and the United Kingdom, and into China, where it attacked a hotel market even more fragmented than India's and grew quickly by signing small city hotels onto the OYO brand. The Chinese operation was the most aggressive of the overseas bets and the first to be cut back, when the cost of running it against local competition and then the travel collapse of 2020 made it unsustainable. The pattern repeated in several markets: sign properties, build density city by city, and retreat if the unit economics did not follow.^[1]

In Japan the company went in through joint ventures announced in 2019 with SoftBank and Yahoo! Japan, its largest shareholder and a local internet group, which allowed it to enter a market where local partners were needed for distribution and property access.^[1] The Japanese arrangement was also a reminder of how closely OYO's expansion was tied to SoftBank, the investor that had funded its growth and was now introducing it to the companies in its own portfolio.^[1]

Europe came through buying rather than building. The 415 million dollar acquisition of the Amsterdam based @Leisure Group in 2019 brought in Belvilla, DanCenter, Danland and Traum-Ferienwohnungen, and with them a business that manages holiday homes for owners rather than leasing city hotels. That distinction turned out to matter. A vacation rental managed for an owner earns a fee without a rent obligation, which is a far lighter commitment than a leased hotel in a city where occupancy can fall.^[1][13]

The United States was the last major entry and the most expensive. OYO bought the Hooters Casino Hotel near the Las Vegas Strip in 2019 in partnership with the American real estate firm Highgate for 135 million dollars, its first large investment in the country.^[1][4][5] Then, in December 2024, it completed the purchase of G6 Hospitality from Blackstone for 525 million dollars, taking over the parent of Motel 6 and Studio 6 and with it an established economy hotel business with thousands of properties.^[1] Buying a recognised American brand was a different strategy from the one that built the company: instead of creating a brand out of unbranded rooms, OYO bought the recognition it had spent a decade trying to earn.^[1]

Funding and valuation

OYO's investor list reads like a roll call of global and Indian venture capital: SoftBank Group, Didi Chuxing, Greenoaks Capital, Sequoia India, Lightspeed India, Hero Enterprise, Airbnb and China Lodging Group. Between 2015 and 2019 the company raised more money than almost any Indian consumer startup of its generation, which is what allowed it to sign up properties and lease hotels at a speed its rivals could not match.^[1]

In September 2018 OYO raised 1 billion dollars, with the first 100 million dollar tranche filed in February 2019. In February 2019 the Chinese ride hailing company Didi Chuxing put in 100 million dollars. In July 2019 Agarwal's RA Hospitality Holdings signed a 2 billion dollar deal to buy shares from Lightspeed Venture Partners and Sequoia India and raise his stake to about 30 per cent, in a transaction that valued the company at 10 billion dollars. In October 2019 SoftBank led a Series F round of 1.5 billion dollars.^[1]

The valuation story is the part that is most instructive. A company valued at 10 billion dollars in 2019 was valued at about 2.5 billion dollars when it raised money in June 2024, a fall of more than 70 per cent. That decline reflects a change in how investors value growth in hospitality: rooms signed at a loss are not worth the same as rooms that make money, and the market repriced the company accordingly.^[1]

Debt entered the picture as equity became harder to raise. In July 2021 OYO closed a 660 million dollar debt financing round from institutional investors to service existing loans, which is a different kind of money from the venture rounds that had funded the expansion years: it has to be repaid, and it does not come with a higher valuation attached.^[1]

Two features separate OYO's funding history from that of most Indian startups. The first is that the founder bought his way to a large stake with outside finance rather than earning it through dilution, which concentrated both the upside and the risk in one person. The second is that the company's largest shareholder is a single global fund, SoftBank, whose own fortunes have been tied to the company's. When a company is valued for its growth and funded by one dominant investor, a change in that investor's appetite is felt immediately, and OYO felt it in the gap between the 10 billion dollar valuation of 2019 and the 2.5 billion dollar valuation of 2024.^[1]

Financials and the path to listing

OYO has never completed the public listing it prepared for. In October 2021 the company filed its draft red herring prospectus with the Securities and Exchange Board of India to raise 1.2 billion dollars through an initial public offering. The filing came after a 660 million dollar debt round in July 2021 and a strategic deal with Microsoft in September 2021, and it was intended to give the company permanent capital after years of private funding.^[1]

The listing did not go ahead on that timetable. By June 2024 the company was raising private money again, this time between 100 and 125 million dollars, at a valuation of about 2.5 billion dollars. A company that files to raise 1.2 billion dollars and then raises roughly a tenth of that two and a half years later, at a quarter of its former valuation, tells you most of what there is to know about how the hospitality market changed.^[1]

The company's financial reporting is complicated by its mix of owned, leased and managed properties, and by the acquisitions that brought in European vacation rentals and American economy hotels. Revenue from a leased hotel is the room rate, while revenue from a managed property is only the fee, so two OYO figures for the same number of rooms can look very different depending on how the properties are held.^[1]

The 525 million dollar purchase of G6 Hospitality in December 2024 was paid for at a time when the company's own valuation was near its lowest. Buying the parent of Motel 6 and Studio 6 gave OYO a large and established United States business, but it also increased the company's exposure to the American economy hotel cycle just as it was still working to make its Indian core profitable.^[1]

Ownership and leadership

Ritesh Agarwal is the founder and the public face of the company, and his personal stake of about 30 per cent after the 2019 buyback makes him one of the largest individual shareholders in an Indian hospitality business. The buyback was financed through RA Hospitality Holdings, a vehicle registered in the Cayman Islands, which allowed him to increase his holding without the company issuing new shares.^[1]

SoftBank Group is the largest institutional shareholder, having led the Series F round of 1.5 billion dollars and held a stake since the middle of the decade. Sequoia India, Lightspeed India, Greenoaks Capital and Hero Enterprise were among the other investors, and Airbnb held a stake after the 2019 partnership that put OYO properties on its platform.^[1]

The board was strengthened ahead of the planned listing. In October 2021 OYO appointed the Paralympian Deepa Malik as an independent director, and in December 2021 it brought in Rajnish Kumar, the former chairman of the State Bank of India, as a strategic group adviser. Both appointments were read as an attempt to add public company experience to a board that had been dominated by investors and the founder.^[1]

Governance is a live question for OYO because of its structure. A founder controlled company with a large single institutional investor, an arbitration loss that questioned the completeness of an earlier transaction, and a planned listing that has not happened is a combination that keeps the company under closer scrutiny than its peers.^[1]

Employees and training

In 2019 OYO said it had more than 17,000 employees globally, of which roughly 8,000 were in India and South Asia. The company added people faster than most Indian hospitality businesses ever had, hiring general managers for individual properties and building teams to sign up hotels in new cities.^[1][5]

The company also invested in training. It set up 26 hospitality institutes across India in 2019, and it opened a campus in Gurgaon with plans for a skill training centre attached to it. The logic was that standardising rooms requires standardised staff, and that the people who clean and manage an OYO property needed to be trained in the company's methods rather than simply told about them.^[1][6][7]

The workforce is the company's largest fixed cost and the most sensitive to occupancy. Because OYO often leases properties, it pays for staff and rent even in a bad month, which is why the shift towards managing properties for owners rather than leasing them is important: a managed property converts a fixed cost into a variable one.^[1]

Acquisitions and partnerships

• Qlik Pass team, hired in 2016 to build the company's data science function, an early sign that OYO wanted to run hotels as a data business.^[1]
• Novascotia Boutique Homes, acquired in 2018 to enter serviced apartments and corporate executive stays in Chennai and beyond.^[1][3]
• Weddingz.in, a Mumbai based online marketplace for wedding venues and vendors, acquired in 2018.^[1][9]
• @Leisure Group, the Amsterdam based European vacation rental company, acquired in 2019 for 415 million dollars.^[1][12]
• Hooters Casino Hotel, bought near the Las Vegas Strip in 2019 with Highgate for 135 million dollars, the company's first major United States investment.^[1][4]
• Innov8, a New Delhi co-working space business, acquired in 2019.^[1]
• DanCenter and the Danland resorts, which came with the @Leisure acquisition and form the core of OYO Vacation Homes in Scandinavia.^[1]
• Danamica, a Copenhagen based data science firm bought in 2019 for 10 million dollars.^[1]
• Airbnb, which signed a strategic partnership in 2019 to list OYO properties on its platform.^[1]
• Hotelbeds, with a global distribution partnership announced in 2019.^[1][10]
• Direct Booker, a Croatia based vacation rental manager, acquired in 2022 in a deal valuing it at about 5.5 million dollars.^[1]
• G6 Hospitality, the parent of Motel 6 and Studio 6, acquired from Blackstone in December 2024 for 525 million dollars.^[1]

The technology behind the rooms

OYO describes itself as a hotel company, but the machine that made it scale is a booking and pricing system. The first serious investment in that side of the business came in March 2016, when OYO acquired the team of the technology firm Qlik Pass, founded by Rahul Gupta and Rishi Swami, to set up and lead a data science department.^[1] The point of hiring a data team for a budget hotel chain is that a chain with thousands of small properties has to price each one separately, forecast demand city by city, and decide which hotels are worth refurbishing and which are not.^[1]

That capability was extended by acquisition. In September 2019 the company bought Danamica, a Copenhagen based data science firm that specialised in the pricing and yield management of vacation rentals, for 10 million dollars, which was a direct attempt to bring the same techniques to the holiday home business it had just entered in Europe.^{[1] [13]} Between the Qlik Pass team and Danamica, the company assembled the technology to run two very different kinds of accommodation on one platform.^[1]

The partnerships followed the same logic of scale. In 2019 OYO signed a global distribution agreement with Hotelbeds, which put its rooms in front of travel trade buyers rather than only its own app users, and it announced a strategic partnership with Airbnb to list OYO properties on that platform.^[1][10][11] In September 2021, having raised a 660 million dollar debt round two months earlier, the company signed a multi year strategic agreement with Microsoft, which was read at the time as both a technology deal and a step towards the listing the company was preparing.^[1]

OYO has also tried to speak for the industry it depends on. In June 2021 it joined Yatra, Airbnb and EaseMyTrip to form the Confederation of Hospitality, Technology and Tourism Industry, an industry body for Indian tourism, which gave the company a channel to argue for the sector with government at a time when travel restrictions had emptied its hotels.^[1] The technology, the partnerships and the industry body all point at the same weakness in the model: OYO is a platform whose supply is owned by other people, so its growth depends on persuading owners to join and on keeping them once they have.^[1]

Competition

In Indian budget travel, OYO competes with online travel agencies such as MakeMyTrip and Yatra, which sell rooms across many hotel brands, and with smaller chains trying to standardise budget properties the same way OYO does. The difference is that OYO controls the brand on the hotel while the travel agencies only sell the room.^[1]

Internationally, the acquisition of G6 Hospitality in 2024 put OYO into the American economy hotel market alongside long established budget chains, while OYO Vacation Homes competes in Europe with holiday rental platforms that aggregate independent homes rather than actively managing them. In both cases OYO is a smaller player entering markets that already have incumbents with decades of brand recognition.^[1]

The competition that hurt OYO most was not another company but the valuation cycle. When capital was cheap, the company could sign properties at a loss and grow, and rivals could not easily match it. When capital became expensive, the same strategy became the problem, and the company had to shift from adding rooms to making the rooms it had profitable.^[1]

Controversies and criticism

The Zostel arbitration is the most serious dispute the company has faced. An arbitrator found in March 2021 that the 2015 term sheet was binding, Zostel asked SEBI to stay the planned listing in October 2021 on the ground that OYO's capital structure was not final, and the Delhi High Court rejected Zostel's claim in February 2022. The episode raised questions about how the company documented deals during its fastest years of expansion.^[1]

Hotel owners have their own set of complaints. Partners who signed up with OYO have said that commission and revenue sharing terms left them with little margin, that minimum guarantee arrangements were changed, and that the company's own pricing decisions undercut their room rates on other channels. These are common disputes wherever a platform sits between a small business and its customers.^[1]

The company's quality record has been uneven. The whole proposition rests on a traveller trusting an OYO sign without knowing the property, and every inconsistent room undermines the value of the brand for every other partner. The 26 training institutes and the general manager model were attempts to solve exactly this problem.^[1]

The collapse in valuation from 10 billion dollars in 2019 to about 2.5 billion dollars in 2024 is itself treated by critics as evidence that the growth of those years was bought rather than earned. Supporters of the company argue that the repricing reflects a change in the market for all growth companies rather than a judgement on OYO alone, and that a business with real hotels in dozens of countries has assets a purely digital company never had.^[1]

The disputes around OYO are mostly disputes about who carries the risk. In a leased hotel the company carries it. In a managed property the owner does. In a franchise the partner pays a fee for the brand. When owners complained about commissions it was usually because they had signed a lease or a management contract during a period of rapid growth and then found the terms harder to live with once the market tightened. The Zostel case, the hotel partner complaints and the fall in valuation all point the same way: the company's difficulty was never demand for budget rooms, it was the cost of the arrangements it made to secure supply quickly.^[1]

Reading the numbers

Three numbers frame OYO. The first is 43,000 properties and 1 million rooms across 80 countries in January 2020, which is the scale the company reached in under a decade. The second is the 10 billion dollar valuation of 2019, which is what the market was willing to pay for that growth. The third is the 2.5 billion dollar valuation of June 2024, which is what the same company was worth once the market decided that rooms sold at a loss are not a business.^[1]

The most useful question about OYO is not how many rooms it has but how many of them make money. Leased properties carry rent and staff through bad months, while managed properties only cost the company a fee if they do not sell. As the company moved towards managing properties for owners and towards established brands such as Motel 6 and Studio 6, the proportion of rooms that generate a fee without a lease obligation became the number that matters most.^[1]

The pending public offering is the other factor. A draft red herring prospectus filed in 2021 to raise 1.2 billion dollars, followed by a private round of about 100 to 125 million dollars in 2024, means the company has spent three years raising money privately at lower and lower valuations. Whether it lists, and at what price, will settle the argument about whether the expansion years created a durable business or an expensive one.^[1]

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