Budget hotel chain Oyo Hotels has signed MoUs with State Bank of India and Bank of Baroda to extend support to budget hotels and creating jobs across levels.
Signed under the aegis of the Pradhan Mantri Mudra Yojna, the MoUs will enable financial support for Oyo’s existing and potential hotel partners to be able to transform and standardize their properties. Oyo claims that this opportunity will also allow it to spearhead the creation of thousands of jobs in Tier II and III cities by nurturing micro-entrepreneurs in the hospitality sector.
“We are thrilled to join hands with banking powerhouses - the State Bank of India and Bank of Baroda and achieve the mission of job creation in the country by enabling the youth to emerge as micro entrepreneurs and run their own successful businesses. These MoUs will help us in shortening the demand-supply gap of quality accommodation by offering hoteliers a platform to transform their property and enhance the business by creating beautiful living spaces. In the past, partner hotels have witnessed an increase in revenue and occupancy levels after becoming a part of OYO’s chain of hotels. On average, in business cities, we have been delivering 80%+ occupancy,” Jayant Chauhan, SVP - Fintech, OYO, said in a statement.
Ritesh Agarwal, Founder and CEO of OYO signing MoU with Bank of Baroda
Oyo has established an in-house Fintech division to be able to provide financing and collateral-free loans for its through banks and NBFCs. These loans, Oyo claims, will help individuals hailing from Tier II and III cities to be self-employed and run their own budget assets with OYO’s diverse brand portfolio allowing them to become a partner through OYO Home (two rooms and above) or OYO Rooms under franchise or manchise model.
The company is further utilizing machine learning models and data analytics in this process and all these facets will come together to strengthen the country’s micro-entrepreneurship ecosystem.
Jayant added, ‘’As a category, over the years, budget hotels have been overlooked as the preferred accommodation option. This may have been due to smaller ticket values, lack of predictable, standardised services or a lesser attraction for not-so-known brands. Nonetheless, this niche caters to one of the biggest travel segments in India, offering a tremendous market opportunity, of which only about 2% has been tapped so far,” adding that as technology and technology and innovation is driving new business practices in the hospitality space, there is much scope for budget hotels to expand further.