OYO tries to take over UPSTDC’s loss making propertis
OYO, the budget hotel chain, is seeking the possibility of having the loss making properties of Uttar Pradesh Tourism Department to be added to its chain of hotels.
OYO today said to have preliminary discussions with the UP Tourism Department and UP State Tourism Development Corporation (UPSTDC) officials in Lucknow.
“We are keen to partner with the state tourism department for operating their existing assets and turning them around. State government officials have seen our system and how we operate,” Ankit TandonOYO Hotels and Homes (operated business) COO told the media.
If succeeded, it would be OYO’s first such arrangement with a state government in India, stated Ankit.
As per statistics, only 15 out of around 100 properties of UPSTDC are profit-making or self-sustaining, while the rest are accumulating losses. The UP government has long been planning to turn around these properties by leasing them out to private partners for operation and management, however could not succeed so far.
“The state government is keen on upgrading the tourism infrastructure and ramp up the availability of affordable hotels. Since, the UP tourism units are not in good shape, we are looking for partnerships with private players, such as OYO to operate them on lease or other terms as agreed upon mutually,” said Awanish Awasthi , UP tourism principal secretary and UPSTDC director general.
He said the UPSTDC, which had been a loss-making entity over the past several years, has now started to log profits.
“The Corporation, which made a profit of about Rs 3.5 crore in 2016-17, saw its profit more than double to Rs 8 crore in 2017-18 and in the current fiscal, the profit is likely to touch Rs 15 crore,” added Awasthi.
Meanwhile, OYO, which is South Asia’s largest and world’s fastest growing chain of hotels and home spaces, today launched its mid-market offering ‘Townhouse’ in Lucknow.
OYO has over 8,700 properties in India on franchise, ‘manchise’ or lease contracts. It operates 84 Townhouse properties in Delhi, Mumbai, Noida, Gurugram, Bangaluru, Hyderabad, Chennai, Pune, Nagpur, Kolkata, Ahmedabad, Ghaziabad, Goa, Jaipur and Lucknow.