Exclusive: Oyo gives up brand name for corporate properties, to use Capital O, Edition O instead

These properties are available for booking on the hospitality firm's website pages across cities such as Bangalore, Goa and Hyderabad.

Even the logos of all three brands are distinctly different from that of Oyo's.

Last year, Oyo had launched a premium mid-market property segment under the brand name Oyo Townhouse.

The average prices of these properties were expected to be upwards of Rs 3,000 per day.

"Many a times your brand perception is your reality. Even though properties such as Townhouse offer customers a premium experience, many customers still see it as a budget property since it has Oyo's brand name associated with it," said one of the sources mentioned above.

"The idea behind the launch of standalone brand names would be to construct a fresh image in the mind of consumers which will be distinct from budget properties," the source said.

The source also said Oyo is even considering removing the 'Oyo' prefix from Townhouse's brand name.

Ironically, these properties are currently available on the company's page for as low as Rs 1,600. It wasn't immediately clear if this was some sort of an introductory price.

The low pricing can potentially result in a boomerang effect on the whole idea of launching separate brands for premium properties.

One of the above-mentioned sources also said that all properties under the Townhouse, Silver Key, Capital O and Edition O brand names will be priced at Rs 3,000 or more.

Oyo will not be renovating the properties under Edition O and Capital O brands, unlike what it does for a Townhouse.

These will mostly be three star hotels or nicely-built standalone properties where a renovation to improve quality is not necessary.

Since these properties will not have the look and feel of a Townhouse, they are being kept in a different category.

Also while Edition O is expected to be run by Oyo's staff, Capital O will just get Oyo's tools and technology and will be run by the existing staff.

Started in 2013 by 23-year old Ritesh Agarwal, Oyo used to aggregate select rooms across hotels and offer them on its website.

However, the company received a lot of flak on social media for poor customer service, and poor quality of inventory in some parts of India.

The Gurugram-based company now has a franchisee model, under which it offers customers rooms from exclusive properties that have either been leased by Oyo or are run on a revenue-share basis.

Oyo, which currently claims to have over 5,000 exclusive hotels in its chain, is also in talks to raise more funds through a share sale.

Last month, Moneycontrol reported that its existing investor Softbank has asked it to get new investors, after which it will participate in a fresh round of funding, which could be fetch as much as $500-700 million.

Oyo last raised around $250 million in a round led by SoftBank Vision Fund, and another $10 million from Nasdaq-listed Chinese hotel operator China Lodging Group, in September.

Although the company did not disclose its valuation then, sources said it was around $850 million.

After Moneycontrol ran this story, Oyo issued the following statement:

"We would like to unequivocally state that OYO Townhouse will remain OYO Townhouse and there are no plans of any dissociation or brand change.

The brand, OYO, is today synonymous with comfortable stays and quality living spaces across our diverse offerings including OYO Rooms, OYO Townhouse, OYO Home and OYO SilverKey. No brand is dissociated from OYO as all of them will be booked through OYO app itself as single point.

We launched OYO Townhouse in 2017 as the friendly neighborhood hotel. We have expanded our network to over 10 cities including Delhi, Gurugram, Mumbai, Goa, Bengaluru, Chennai, Pune, Hyderabad, Noida and Kolkata and have aggressive plans for its expansion with opening Townhouse hotels in 12 more cities. We have seen an overwhelming response to it with these hotels running at a 88 percent occupancy at a network level delivering great guest experience.

We are determined to grow deep in the 4 million rooms Indian hotel market and occupy a 4 percent share by 2018-end and also introduce our offerings to other international destinations in the coming time. Indian market has a huge white space under $100 price point and we will continue to introduce multiple brands to target different customer segments. Needless to say, the common thread across our brand architecture is OYO's mission on creating access with quality, location and affordability."