OYO announces strategic partnership with China’s Meituan

OYO Hotels & Homes has announced a year-long strategic partnership with leading Chinese online services company Meituan that will see the SoftBank-backed company list its properties on the Meituan Hotels platform.

The announcement comes about a month after the Gurgaon-headquartered company had also announced a tie-up with Ctrip, a leading Chinese online operator, as it looks to go deeper in its the world’s second-largest economy, and one that it refers to as its second home market alongside India.

The company did not share the financial terms of the partnership.

In its statement, OYO said that under the terms of its partnership with Meituan, OYO Jiudian, its Chinese subsidiary, will list 8,000 properties on the latter’s platform, allowing it to drive consumer traffic, data operations brand promotions.

“Our partnership with Meituan is a reflection of our commitment to providing quality living spaces to consumers and creating higher value for small- and medium-sized standalone hotel owners across China,” Sam Shih, chief operations officer at OYO Jiudian, said.

Meituan, which raised $4.2 billion in its Hong Kong initial public offering last year, was reported to have pipped Ctrip in terms of domestic room nights booked, claiming 33.6% market share for Meituan versus 33% for Ctrip.

“We have held strong the principles of opening up and achieving mutual wins. We wish to work with various kinds of partners to harness technological innovation and provide well-rounded services that satisfies our customers…,” Guo Qing, vice president - Meituan Group, general manager of Meituan Hotel, Meituan Ticketing and Meituan Vacation, said in the statement.

In an chat with ET in November last year, Ritesh Agarwal, group chief executive of OYO had said that the company, at the time, received close to 70% of its business in the country through organic channels, which includes the OYO app and walk-ins, with certain digital platforms, such as Alibaba-backed Fliggy, Qunar and super app, Tencent-backed Meituan providing the rest of the traffic.

“We get close to 15%-20% of our revenue from third-party distributors, which includes multiple online travel operators. We have a different partnership agreement with each one of them,” Agarwal had said.

The development also comes soon after the company was reported to have sacked an undisclosed number of employees at its Chinese subsidiary Oyo Jiudian, two Chinese media outlets said, although a company spokesperson refuted the claims, terming them “absolutely incorrect.”

“Facts are being twisted and misrepresented. In the last few months, we have hired over 1,500 people and will have over 10,000 full-time employees. The resumption of any letting go is wrong, where regular monthly performance reviews are being twisted and reported out of context.”

Oyo has also said it will allocate $100 million for customer experience, and quality and systems improvements in China, the first tranche of its earlier stated commitment to invest $600 million in the country.