Oyo Buys The @Leisure Group

Oyo buys The @Leisure Group.
   
Oyo buys The @Leisure Group from Axel Springer for $415 million.
   
The @Leisure Group manages 30,000 holiday homes across 13 countries in Europe and lists a further 85,000 on its online booking platform.  This reflects a preference for private properties rather than hotel rooms.  An obvious opportunity to build a global brand in the vacation rental sector.  Its offerings include the full-service providers Belvilla and DanCenter and the online holiday home marketplace Traum-Ferienwohnungen.
    
Oyo has scaled fast with a tech-driven franchise model, focusing mainly on small hotels.  636,000 hotel rooms in 24 countries at a recent count.  They already claim to be the world’s 6th largest hotel brand by room numbers and aim to be the biggest by 2023.  This deal boosts Oyo’s presence in short-term property rental, an increasingly important part of its business.
    
Ritesh Agarwal of Oyo said: ‘We believe we can create a hotel-like consistency of service with a homelike experience.  We see vacation homes as a unique opportunity with 115,000 units of homes now getting added to our already growing count of beautiful homes.’  Ritesh says Oyo’s capital-light franchise and outsourced management model reduces the risks of rapid expansion in the hotel sector.  He said the company did not have a view on its future mix of hotels and rental properties but would pursue growth in both.
   
The @Leisure Group has the same approach to home rentals as Oyo has to hotels: boost efficiency with tech and achieve consistent quality across branded properties.  It’s a full-stack approach to vacation rentals management, with deep data-driven capabilities in revenue management, homeowner engagement, and property management services.  They give property owners an algorithmic platform that advises them on the optimal rate to charge guests by analyzing thousands of other properties with similar locations and characteristics.  Properties are equipped with smart electronic locks and codes that change for each booking.
   
Tobias Wann of The @Leisure Group said: ‘There's now an opportunity to build a global brand in the vacation rental sector.  You don’t have that yet.’  Tobias asserts Airbnb is a distribution platform rather than a property brand.
    
The all-cash deal reflects a recent wave of investments in Oyo and other start-ups, spearheaded by SoftBank and its $100 billion Vision Fund.  Last September, SoftBank led a $1 billion funding round of Oyo with Grab, Lightspeed Venture Partners, Sequoia Capital, Hero Enterprise, China Lodging Group, and Greenoaks Capital into a valuation of $5 billion.  In April Airbnb invested $100 million.
   
Maninder Gulati of Oyo said of SoftBank: ‘When we were doing due diligence, some of those guys were in the room with us.  They’ve been there with us in the trenches.’  Maninder says the company expects to benefit from a growing number of Chinese and Indian visitors to Europe who will rent private properties.

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