Oyo to Enter F&B with In-House Kitchens and QSR Carts

With an emphasis on Townhouse by OYO-branded hotels, Oyo has declared its intention to enter the food and beverage industry. It plans achieve this goal by establishing in-house kitchens and Quick Service Restaurant (QSR) carts/lobby stores at its company-serviced hotels, the firm said on May 1.

According to Oyo, this programme will provide in-house cooking services to guests at 1500 of its company-serviced hotels in FY26. By choosing the "Kitchen Services" option, visitors will be able to place meal orders through internet channels such as OTAs and the Oyo app.

Depending on the specific hotel profile and backend infrastructure, the kitchen configuration could range from a full-fledged commercial kitchen for a large menu to a pantry setup for basic food items, according to Oyo.

Introducing QSR Carts and Lobby Stores

Oyo is launching QSR carts and lobby stores under the "Townhouse Cafe" brand in addition to in-house kitchens. According to the firm, the menu will emphasise reasonably priced meals that include both continental and regional cuisine.

According to Oyo, on a steady-state basis, it anticipates that F&B will add 5%–10% to hotel revenue. Since January of this year, Oyo has started a pilot program at 100 company-serviced hotels in a few cities, including Delhi, Gurgaon, Hyderabad, and Bangalore, to test the idea.

According to the firm, this has cleared the path for the nationwide launch in the next fiscal year. Chief Operating Officer Varun Jain, Providing 'fresh', 'convenient', and 'quality' meal options throughout its network, Oyo stated, the project seeks to improve the in-hotel eating experience for travellers.

A network of "trusted F&B experts" is being established in major cities including Delhi, Mumbai, Bangalore, Hyderabad, Pune, Indore, Kolkata, Jaipur, and Lucknow, according to Oyo, to assist this.

Broader Push to Increase Revenue Streams

The QSR initiative appears to be a component of Oyo's larger effort to increase income by offering related services. The company has previously ventured into the food industry; in 2019, it started a cloud kitchen business but shut it down during the pandemic.

Despite being a logical progression of the hotel industry, food operations demand specialised knowledge and committed staff. Oyo probably learnt a lot from its first try and now seems more equipped to grow its food company in a more strategic and sustainable way.

Oyo Hotels and Homes Pvt. Ltd. reported a 15% drop in revenue from INR 1,312 crore to INR 1,113 crore for FY24, a significant drop.

The company declared a profit of INR 11.5 crore over a loss of INR 27 crore in FY23, according to documents filed in January with the Registrar of Companies.

This was mainly due to a reduction of INR 6 crore in overall expenses and a positive growth in extraordinary items from a loss the previous year.