OYO places big bet on Europe with buyout of vacation rental chain @Leisure

Gurugram-based hospitality chain OYO has agreed to acquire Amsterdam-based @Leisure Group.

OYO didn't disclose the total deal value but TechCrunch reported that the amount was about $415 million (€369.5 million).

In a statement, German-headquartered media and technology company Axel Springer, which owns @Leisure, said it will receive a total of about €180 million, including the repayment of a shareholder loan of around €60 million. The total volume of the transaction has an EBITDA multiple of more than 15 for 2018, it said.

In a separate media statement, Maninder Gulati, chief global strategy officer for OYO said that the acquisition will help the company boost its vacation rental business in Europe.

“We see vacation homes as a unique opportunity with 1,15,000 units of homes now getting added to our already growing count,” Ritesh Agarwal, founder and group chief executive of OYO said.

As part of the transaction, Tobias Wann, CEO of Leisure Group, will join OYO as the CEO of its global vacation homes vertical. Besides, he will also work closely with Gulati, the statement added.

“If one were to look at Europe alone, there is an ever-increasing demand for vacation homes with an increasing trend of booking an entire home. Further, in such a market of largely fragmented small and independent players, and a handful of established players,” Gulati added.

Founded in 1980, @Leisure manages a total inventory of more than 300,000 across property categories such as holiday homes, holiday parks, and holiday apartments across Europe. Through its brands Belvilla, DanCenter and Danland, it offers more than 30,000-fully managed holiday homes in 13 countries in Europe. Likewise, its Traum-Ferienwohnungen brand offers a subscription-based home management service with over 85,000 homes across 50 countries

For OYO, this acquisition allows it to enter a market that represents a potential 30-40% share of a $2-trillion market opportunity spread across 100 million homes covering vacation rentals and urban homes, the statement added.

The latest development also comes close on the heels of media reports which said that it had acquired a much smaller Chinese player Qiayu.

OYO has aggressively spread its wings to overseas markets over the last one year or so, launching properties across Southeast Asian nations such as the Philippines, Indonesia and Japan. It is present in the UK and Saudi Arabia, among other countries. Agarwal recently identified China, Southeast Asia and the Middle East as its core overseas markets. 

In India, OYO currently operates in more than 259 Indian cities across 1.75 lakh rooms in 8,700 hotels and homes via a mix of both franchise and lease models across all price ranges.

Last month, OYO launched a branded programme, The OYO Partner Engagement Network, in a bid to get more asset owners and properties on its platform.