India’s largest budget hotel brand Oyo Rooms is mulling to acquire Treebo Hotels, Business Standard claims after citing an unknown source familiar with the matter.
Mails sent to Oyo Rooms and Treebo Hotels did not elicit any response.
If this acquisition does happen then it will go down as one of the biggest acquisitions in the budget hotel space. The acquisition will also push Oyo to almost a monopoly position in the budget hotel industry. Although it will continue to face competition from lesser illustrious rivals like Fab Hotels & other small rivals, Oyo’s financial muscle and funding clout has almost diluted the level playing field in the budget hotel market.
In fact, it has been a catch me if you can thing as far as Oyo’s competitors are concerned. A slight comparison is enough to show the huge chasm that exists between SoftBank funded Oyo and its nearest rivals like Treebo. For instance, as of today Treebo operates nearly 10,000 rooms across 400 properties whereas Oyo operates properties in 8,500 hotels across 230 Indian cities and also in international markets like Malaysia, UAE, Nepal, China and Indonesia.
Oyo is now probably the only budget hotel brand to enjoy a formidable presence in the international market.
The gulf between Oyo and Treebo widens further if we take into account both companies funding clout. While Oyo has amassed $2 Bn through multiple funding rounds, Treebo has managed to secure only $57 Mn till date. Oyo’s recent $1 bn funding round led by SoftBank is also indicative of Gurgaon based company’s funding ability. That funding round helped the company to earn the coveted unicorn tag.
It seems that the unsustainable competition may have pushed Treebo towards merger talks. In fact, a few months back Treebo was rumored to have held merger talks with Fab Hotels as well.
With Oyo Rooms now looking almost unbeatable, Treebo and Fab Hotels’ push towards acquisition does make a lot of sense.
