OYO
Agarwal dropped out of college in his teens to travel across the country and founded the Gurgaon-headquartered Oyo in 2013. He dreamed up the business as a way to standardize the hotel stay experience in a developing market like India
OYO with a complete tech stack technology platform for hotel operation which helps transform fragmented, unbranded, and underutilized hospitality assets into branded, digitally-enabled storefronts with higher revenue generation potential and provides its customers with access to a broad range of high-quality storefronts at compelling price points.
The company is helping to make travel more affordable and accessible for people in India. As of March 31, 2021, the company had 157,344 storefronts across more than 35 countries listed on our platform. Its loyalty program OYO Wizard is one of the largest runs by leading travel or food brands in India and the largest among online hotel or food brands in India. We had 9.2 million OYO Wizard members (including 2.1 million members who pay subscription fees for higher membership tiers) in India as of March 31, 2021
OYO charges 20- 35% of revenue for its listed storefront - The company invests in capex and hires general managers to oversee operations and customer experience. Price is based on the investment company makes in the renovation and other operation capex.
As of March 31, 2021, 70.9% of employees were based in India. The company engineering team plays a critical role in our business and comprised 13.2% of our employees as of March 31, 2021, most of whom are based in India
FHRAI (Federation of Hotel and Restaurant Association of India) to carry out nationwide protests. Even hotel owners have planned to issue legal notices against OYO over some serious issues like deep discounting, high commissions, as well as frequent changes in arbitrary contracts. As per management, there is no legal notice company received and they think 90% of hotels are happy with OYO,
In June 2021, Oyo Rooms collaborated with Yatra, Airbnb, and EaseMyTrip to form the Confederation of Hospitality, Technology, and Tourism Industry (CHATT), an industry body for the tourism sector of India. With this OYO set up 26 training institutes for hospitality enthusiasts across India in 2019.
OYO had tried to go public by listing the company in 2021 and at the same time SoftBank, the largest investor in Oyo, had cut the Indian hotel chain’s valuation to $2.7 billion. Now as overall tech industry valuation is correct the company is reported to be trying to list again in 2023.
Now COVID is out OYO has partnered with Microsoft for the cloud and AI to make the tech engine to be driven from the modern AI stacks. With that company has pulled back from certain overseas markets and shifted away from asset-heavy, capital-intensive models to build technology as a service.
In an interview Patanjali Keswani Chairman & MD of Lemon Tree considered OYO to be working in the market below its Economy brand RedFox. Definitely, in the last 5 years Lemon Tree has struggled to increase prices in its lower segments and now trying to upscale itself to be at a higher price range.
It is true India at a lower price range there is good volume but low pricing power. OYO is an interesting company as the Hotel industry is extremely fragmented and helps people to have affordable accommodation. As a tech player, they could grow, helping fragmented industries to compete with the top brands.
If it is really going to list the company this time it would be interesting to study further or is it another Zomato?
Further Read