Developers in Dubai may get another chance to clear part of their inventory. The Indian hospitality brand, Oyo, considering possibilities to launch its “Town house” concept in the emirate.

What this does is take up mid-tier properties on longer leases and position them for a younger generation of clientele. “These would be on long-term leases with landlords, different from the usual norm for us in India and other parts of the world,” said Ritesh Agarwal, CEO of Oyo. “We are open to a five- to ten-year — or even longer-term — leases.”

The operator currently has 45 Town house-branded properties in India and the UK. Locations such as Dubai South or some of the fast-emerging locations of the city — and where there is massive new supply of new properties coming — could be likely locations for the Town house concept.

For the moment, though, Oyo is bulking up its hotel inventory in the mid-range. It had focused on the entry level in India, and making overnight stays accessible to a larger base of travellers in that country.

It’s a formula that will be applied in the UAE — “With room rates starting at Dh150, Oyo plans to host guests in over 12,000 rooms, 150 hotels and all seven emirates by 2020,” said Agarwal. “In the UAE, we will focus on the two, three and four-star hotels.”

In an industry that has been upended by airbnb, new-fangled hotel concepts are being tried out in the UAE. The emphasis is no longer confined to building more of the luxury hotels where possible.

“All assets are under a franchise or leased agreement, where Oyo takes full control of the inventory,” said Agarwal, who pulled in $1 billion by way of funding from famed Masayoshi Son’s SoftBank Investment Advisers last month.

“Our average Oyo property has close to 80-100 rooms per property. We’ve been at the forefront of the budget and mid-segment hotels revolution in the markets we operate in and have the ability to bring in our operational expertise and technology edge to the benefit of independent hotel owners.

“Oyo is formally announcing its entry in the UAE with a total of 1,100 units with over 10 properties across Dubai, Sharjah, and Fujairah. By 2020, Oyo should have close to 12,000 rooms across 150 properties.”

Switching UAE from its premium focus

Budget is where the action is likely to heat up in the local hospitality space.

“We believe these segments are growing faster than the premium segments in each of the seven emirates. We are confident that our core values of quality, location, standardisation, and consistency will bring help to redefine customer experience within the two, three and four-star segments,” said Ritesh Agarwal of Oyo.

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