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Last Updated : Sep 21, 2018 06:05 PM IST | Source: Moneycontrol.com

OYO Rooms may face competition from China's Jin Jiang

India’s burgeoning hotel aggregator space could see competition from China in the form of Jin Jiang, the world’s fifth largest hospitality company.

India’s burgeoning hotel aggregator space could see competition from China in the form of Jin Jiang, the world’s fifth largest hospitality company.

A top executive of Jin Jiang’s subsidiary company Louvre Hotels said an aggregator could have synergies with their own properties in India. Louvre Hotels is currently one of the largest hotel companies in India with 130 operational properties.

Speaking to Moneycontrol, Saurabh Chawla, Global Chief Development Officer, Louvre Hotels Group said, “The aggregator model fills a big gap in the market and has the potential to be rolled out all over the world. They are not a real threat to us but there can be a lot of synergies between us. We have a similar model in China. If there is a need if would definitely come in into the market. We are open to all sorts of options including bringing our own brand in this segment”.

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Louvre Hotels is one of the four hotel companies under the Jin Jiang portfolio.

Jin Jiang has a total of 6,932 hotels spread across 54 countries and more than 50 brands. As of 2017, the company's turnover stood at 19.75 billion RMB (about Rs 20,800 crore). The group brands such as Royal Tulip, Golden Tulip, Sarovar Hotels, Hyriad and Tulip Inn are operational in India.

The market

With over 8,500 hotels comprising more than 70,000 rooms, Gurgaon-based OYO Rooms is the largest company in this space operating mainly in the budget segment. This five-year-old, SoftBank Group-backed company has a market share of more than 50 percent in the aggregator space.

OYO made its foray into China last year and has since opened 1,700 hotels across 170 cities, with 86,000 operational rooms.  Room rates per night are kept lower at 100-200 RMB (Rs 1,000-2,000) compared to Rs 2,500-3,000. Its corporate office is based in Shanghai.

Other companies in this segment include Fabhotels, Treebo Hotels, Qik Stay, Vista Rooms to name a few. Several other companies including Stayzilla suddenly folded operations to exit this space.

Unofficial estimates state that there are more than 4 million unbranded rooms up for grabs in India. Only around 1 million has been tapped into by the hotel aggregator companies so far. The branded space such as those from Taj Group, ITC, Marriott Hotels has only around 100,000 rooms.

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First Published on Sep 21, 2018 06:05 pm
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