Mumbai: OyoThe global equity research firm said the decision to focus on markets with the best scale and economics, such as India, Malaysia, Indonesia and Europe, instead of 35 countries, helped the hotel room aggregator survive. Bernstein.

The global total addressable market opportunity of the short-stay housing market is expected to grow from $1,267 billion in 2019 to $1,907 billion by 2030. Oyo sees a $26 billion opportunity in India by 2030 as it considers India as its core growth region, contributing over 90 percent. % of its revenue, the research firm said in a report.

“There are several favorable trends for OYO in the global travel and tourism industry and the short-term market. According to Bernstein, the world is getting richer, per capita income is increasing, and growing middle class means increasing demand for travel.

According to Bernstein, OYO’s contribution to unit economics has improved with profit, rising from 5.1% in FY15 to 18.4% in FY21, driven by stable rates, lower discounts and minimum guarantees. OYO’s gross booking value grew by 170% in FY15, led by growth in storefronts, but declined by 67% in FY21 due to closure of storefront operations due to Covid-19. The research firm said gross margin remained stable at 33% with adequate cost management.

OYO Hotels & Homes last week filed its draft prospectus with the country’s capital markets regulator, aiming to raise Rs 8,430 crore ($1.2 billion) through public issues as it seeks to help local startups tapping public markets. An increasing number have joined. The hospitality startup expects to raise around Rs 7,000 crore ($950 million) through new shares, while the rest will come through secondary share sales (offer for sale or OFS).

The company’s total income fell nearly 70% to Rs 4,157 crore in FY21 due to the pandemic, but it also made progress in reducing its losses. Its loss for the same period came down to Rs 3,943 crore from Rs 13,122 crore a year ago.

However, the strong return on investment for hotel/homeowners helped them grow revenue by 1.5 times to 1.9 times compared to revenue at independent hotels, Bernstein said.

For OYO, one of the main ways to acquire consumers has been through marketing and promotion, and it cut this vertical in FY21 as well. It spent Rs 542.6 crore on marketing and promotion in FY21, compared to Rs 1,879.7 crore a year ago. Oyo said it reduced its employee benefit expenses by 63% to Rs 1,742.1 crore in FY20 from Rs 4,765.2 crore in FY20.

“OYO’s strong revenue retention cohort is a clear demonstration of the persistence of its customers. More than 80% of the company’s revenue comes from repeat and organic customers. The measure of direct demand on the platform, measured as a percentage of nights booked, was 90% in India, Bernstein said.

Oyo addresses the pain points of hotels and homes in key markets. The company provides offline onboarding tools, third party delivery and demand, online revenue management, operations management, and customer service, all integrated into one place.

Due to increased connectivity and awareness of tourist destinations through social media, keeping COVID-19 aside, the world is more accessible. Newer generations are traveling more because they have a greater tendency to travel, and have more affordable travel options.

The research firm said that Covid-19 has given more prominence to domestic travel, especially with the work-from-home format. “Nights per capita (the total of all room nights divided by population) globally in 2019 is expected to reach 1.67x in 2025 from 1.5x in 2019. Global trips are expected to reach $16.7 billion in 2025 and $13.6 billion per night of stay.