Oyo Rooms’ 26-year-old CEO Ritesh Agarwal spent Christmas 2018 driving around Texas, meeting with owners of budget motels near interstate highways. Flush with cash from SoftBank’s Vision Fund, the startup was looking to pay these motels for control of their marketing and sales—the same strategy that turned it into a hotel giant in India and China.
But a year into its U.S. expansion, Oyo’s reality has fallen short of its grand ambitions. Having set a goal of signing at least 100,000 hotel rooms quickly—putting it on par with established names like Motel 6—it ended the year with just over 20,000 rooms. It ended up firing hundreds of salespeople around the U.S. In an interview with The Information, Agarwal said Oyo lost $50 million in the U.S. last year and acknowledged some mistakes in how the company expanded.