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Oyo will flood Japan with economic hotels through a new joint venture with SoftBank and Softbank Vision Fund.
The details, such as the financial investment paid into the joint venture, Oyo Hotels Japan, have not been disclosed.
The new agreement is part of the recent partnership between Oyo and Yahoo Japan, which will include its model Oyo Living house rental in Japan.
The latest agreement will focus on the development of Oyo Hotels, the world's fastest growing economy lodging brand, which has helped its founder, Ritesh Agarwal, become a "watchdog" in the world of hotel.
See the founder of Oyo, Ritesh Agarwal at Skift Forum Asia
The details of the expansion, such as the number of budget hotels and rooms that it expects to have in Japan, were also not available at the time of the press . Oyo has appointed Prasun Choudhary, a founding member of Oyo who, she says, has successfully led a number of Oyo's global activities as an operational partner to lead the company.
"I think there is a place for them in the Japanese market," said Kei Shibata, CEO of Tokyo-based Venture Republic, which runs a group of online travel websites.
"While inbound tourism is growing rapidly in Japan, more and more tourists would come from many countries, including those from Asia, who are often looking for affordable accommodation.
"Since private accommodation was regulated, there is now an additional demand for affordable hotels. Japan's hospitality industry is far from consolidated, with many small independent properties, including ryokans, struggling with operational inefficiencies. This is where Oyo can also find its value. "
The size of the unmarked economy accommodation market in Japan is, however, difficult to find.
In addition, an increasing staff shortage among a significant number of impending chambers could be used to improve Oyo's badet refurbishment model and the use of technologies to reduce labor costs. exploitation, distribution and marketing.
A report published in February 2019 by Savills Research indicates that the largest increases will occur in Tokyo, where the stock of rooms will increase by 25% between 2018 and 2020, while the metropolitan areas of Osaka and Okinawa expected to rise by 23% and 19% respectively. . Most of the offerings to Tokyo and Osaka are already limited service hotels due to the shortage of manpower.
SoftBank, based in Tokyo, thinks that the Oyo model can disrupt the market in Japan.
"By combining Oyo's most advanced business model with the knowledge of the Japanese market by SoftBank Corp., we will offer a brand new hotel experience to Japanese travelers. In addition, Oyo Hotels Japan offers owners different values such as dynamic pricing and booking systems, [eliminating] shortages of manpower and [offering] flexible pricing.
"We are confident that Oyo Hotels Japan will help revitalize the travel market, including inbound tourism and regional revitalization in Japan," said Ken Miyauchi, President and Chief Executive Officer of SoftBank Corp.
Savills think that more supply can stimulate more demand. "The imminent supply of limited-service hotels could very well invade the market. On the other hand, Tokyo is expected to still run out of venues during the 2020 Olympics. As in the logistics sector in the past, the supply may actually induce more demand. As housing in Japan is still relatively scarce, greater flexibility in room booking could attract more tourists, "he said.
Agarwal is eager to play a role in the home of his biggest sponsor.
"Japan is becoming one of the most popular tourist destinations in Asia. We see this as a huge opportunity and we are pleased to contribute to the growth of the local economy by promoting tourism.
"We are excited to be able to offer customers all over Japan affordable, hbadle-free, quality living experiences. And to give independent Japanese hoteliers the latest technological innovations such as AI and hotel management system / ryokan based on machine learning, predictive price management and predictive badysis, as well as that's a transparent operational expertise that will help them focus on the customer's income experience, "he said.
See the founder of Oyo, Ritesh Agarwal at Skift Forum Asia
Photo credit: Hiroshima, Japan. Photo credit: A & K China.
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