OYO's Ritesh Agarwal calls religious tourism a startup opportunity, says it can generate $200 billion in four years

Hospitality technology firm OYO's founder Ritesh Agarwal, who calls himself a religious travel influencer, is betting big on the spiritual tourism boom in India.

Religious tourism can generate $150 billion to $200 billion in 3-4 years, he said at TiE (The Indus Entrepreneurs) Con Mumbai 2025 summit.

"More than 5 lakh people stayed with OYO during the Kumbh in Prayagraj. Around 20 percent of our revenue comes from religious destinations. The top two destinations are Banaras and Tirupati. They are the best performing markets in India. Even today, lakhs of people come to Tirupati daily and it is disproportionately more during school holidays," he said.

Emerging centres like Kanyakumari and Somnath are also seeing more development in terms of hotels, he added.

"In these centres, new hotels are getting built. So, people have more options. Earlier, people used to, say, just go to Dharamshala. As soon as a good hotel comes, people are willing to stay for longer," Agarwal said.

He also gave the example of Ayodhya and the development in the city due to Ram Mandir.

"Look at Ayodhya, the town's economy has changed. Every single person's income, at least who I have met, has gone up by 2-3 times. Because every person is either building a hotel or a restaurant, or selling land, or getting a real estate development. So, that's a massive opportunity."

He also called religious tourism a great startup opportunity.

Overseas opportunity

Like spiritual tourism, Agarwal is seeing a big opportunity in business outside India.

Last month, the company announced plans to invest £50 million in the UK over the next three years, primarily to focus on expanding its premium hotel portfolio. It also detailed plans to invest $10 million (Rs 87 crore) to grow G6 Hospitality's (operators of Motel 6 & Studio 6) digital assets in the US.

"Our company in FY25, did roughly Rs 30,000 crore of bookings, out of which Rs 24,000 crore was from customers outside of India. OYO US is doing very well. Motel 6 is by far the most popular economy hotel brand in the US. On Amazon Prime, we recently partnered with Jack Reacher, which is a show where we have integrated Motel 6. And the actor, the makers of the show were overjoyed that Motel 6 was willing to be a part of the show. It is a very popular brand," he said.

The brand is contributing significantly to OYO's revenue.

"In FY25, we were going to do Rs 1,200 crore in EBITDA (earnings before interest, taxes, depreciation and amortisation) without Motel 6. Including Motel 6, we are doing Rs 1,550 crore. We get around Rs 350 crore additional. Our expectation is that this will grow very aggressively in times to come because we are improving all line items. We are opening more Motel 6 than ever before."

Agarwal's dream is to make Motel 6 even more exciting in the US. Similarly in India, he launched for the Indian customers who are earning more a brand in the luxury segment called Sunday Hotels.

"I want to share with entrepreneurs that when you start a business, you see your business in just one unidimensional perspective. I saw my business as OYO being only focused on economy hotels in India. That is how I started my business. Then we saw customers who wanted to go to the mid-market. I started the Townhouse brand. Our customers wanted to go luxury, so I started Sunday. Same customers went to the Middle East and said, we want to book a Rs 25,000 per night accommodation. So, we opened Sunday in the Middle East."

OYO now has 35 such hotels in UAE and Saudi Arabia where the cost is $300 to $500 per night in the UAE and Saudi Arabia. In the UK, it has around 10 such hotels.

"In India, 50 percent of our business comes from the Townhouse and Sunday brands. And 50 percent comes from the OYO brand. The Townhouse and Sunday brands are growing in double-digit per month, like a series A company. So it will very quickly become 70-75 percent in comparison to the OYO brand, which is becoming smaller and smaller," he said.

Down the memory lane

While Agarwal shared his future expectations, he looked back on his early days of starting his business journey.

"Dr Apoorva Ranjan Sharma (one of the early investors in Oravel Stays which operates brand OYO) had called me but by that time I thought these investors, all of them, speak but no one invests. So, I said I don't think I have the patience to do any more investment meetings. I will build a small business by myself. At least, I would not have big ambitions and then feel disappointment."

Sharma called Agarwal to Mumbai at his expense. "He (Sharma) had invited two other investors. We went to Iskcon Mandir in Juhu for lunch. They (investors) told me that my business is very good. It will be worth millions of dollars. I said all this is fine, but I don't even know how to pay the house rent next month. They gave me a Rs 5 lakh cheque as a loan. For me, that Rs 5 lakh was life changing. I do not think I would be here today without that Rs 5 lakh," the OYO founder said.

Agarwal also said that Sharma sold all his shares at $400 million but he was happy to buy again at $6 billion. "He has been a lifetime partner with us but on and off. He has always been a friend in life."

While Agarwal said that luck plays a factor, he said hard work is a must.

I always think what if Sequoia Capital was not with us or if I had not met the right team members, so many things could have gone wrong. In life so many things had to go right to get the opportunity I got. But I believe hard work increases the probability of being lucky, so what I can do is increase my probability," he said.