Should You Invest in OYO? Analysis of the Oravel Stays Limited IPO
About Oravel Stays Limited
Oravel Stays Limited is better known by the name it does its business - Oyo - an online syndicator of short-stay homes and hotel rooms. It's a new-age technology platform empowering the highly fragmented global hospitality ecosystem. The company has reshaped the dynamics of the short-stay accommodation space since being incorporated in 2012.
Short-stay accommodation market poised for significant growth
The short-stay accommodation market is positioned for remarkable growth in the coming days, with several factors creating a favourable environment for expansion. This market is expected to reach USD 1.9 trillion by 2030 due to strong macroeconomic and favourable demographic factors.
A key catalyst for this growth is the rise of the sharing economy that has made digital platforms the go-to choice for property owners to list their spaces, empowering travellers with an extensive array of choices. Moreover, the global shift towards experimental travel has increased demand for personalised and unique accommodation experiences. Short-stay options are well-positioned to capitalise on this trend. Today, travellers are increasingly seeking accommodations that go beyond mere functionality. They aim for an immersive and memorable stay that contributes to the overall enjoyment of their travel experience.
Also, India is one of the fastest-growing short-stay accommodation markets in the world. Before the COVID-19 pandemic, India's short-stay accommodation market grew at a CAGR of 16.5% as against the global market, which grew at a CAGR of 7.5%. Oravel Stays Limited is poised to take significant advantage of this growing trend with its:
- Expanded presence with a dominant position in key growth markets
The company has an extensive presence of more than 1.5 lakh storefronts spanning more than 35 nations. It has the distinction of the largest footprint in terms of hotel storefronts in India and Southeast Asia. This extensive network not only positions them as a formidable player but also gives customers a range of choices, thereby fostering increased engagement.
- Comprehensive technology platform driving strong value proposition
The company's technological infrastructure is one of the cornerstones of its business. It owns an extensive technology suite that allows it to introduce new products and align its platform with customers' evolving needs. Its comprehensive presence across the value chain enables it to gain a profound understanding of customer's needs and tune its offerings accordingly.
- Robust and reliable brand
The company has firmly established itself as a robust and trustworthy customer brand. It was identified as the most valuable Travel and Hospitality brand in India in 2020 by a study conducted by Kantar. Through meticulous attention to detail and a keen understanding of customer preferences, it has gained a reputation for delivering unparalleled comfort and quality.
- Should you invest?
Going by the above factors, investing in the Oravel Stays Limited IPO can potentially benefit you in the long run. With the travel and tourism industry rebounding from the aftereffects of the COVID-19 pandemic, Oravel Stays Limited is well-positioned to gain from the increasing consumer demand for creating memorable accommodation experiences. That said, it’s imperative to gauge valuations carefully before investing in any IPO, and you must do the same for Oravel Stays Limited.
