How OYO is Leading a New Hotel Business Model?

OYO is an Indian hotel chain founded in 2013 by its Chief Operating Officer, Abhinav Sinha. It has a concept of “low cost” accommodation, which has allowed it to grow to the point of being the largest hotel business in South Asia and the most spectacular growth worldwide.

Imagine this panorama: you finally have a vacation from your work and decide to take a few days off in your favorite city, where you should look for accommodation.

However, those hotels that are close to the places you want to visit are very expensive per night, and those cheaper hotels are poorly located and also doubts of their quality and performance to make you have a good time.

OYO detected a need in travelers for a unique value proposition that would be of quality, affordable and generate confidence so that they did not have to choose between location, price and quality, when looking for where to stay.

So this business set a very clear objective: to make an improvement in real estate assets in order to provide all travelers around the world with an unforgettable quality experience.

That is why this chain is called OYO Hotels & Homes, as it is not only about offering low-cost hotels, but also homes and homes.

Part of the  Inbound Marketing methodology is that it allows us to understand the importance of offering your clients a unique proposal based on their needs , once they are perfectly known, and identified as Buyer Personas .

OYO conducted an exhaustive investigation before launching its business proposal, detecting that the demand and supply of quality spaces for tourists were completely disconnected.

Therefore, its center has been to provide a solution to this problem by meeting the needs of not only travelers, but also that of independent hotels.

To date, OYO has more than 18 thousand accommodations in 800 cities and has Spain as the “key” country for its growth in the European continent. Do you want to know the secret of this growth? Continue with us!

Low Cost Hospitality in Islamabad

Spain is one of the main tourist destinations in the world. “Our value proposition and our comprehensive support services have allowed us to be global. We can say that we have achieved some success replicating, but also adapting, our model to new markets. – Abhinav Sinha, COO of OYO.

So the so-called “hostels” also known as low-cost hotels have a minimum level of development in Spain, so it is a business to explode, although this market has been increasing due to the popularity of tourist apartments and new platforms for young people like Airbnb .

In Spain, the profitability per square meter of this type of spaces could be much higher than that of conventional tourist accommodation, and that is that in hostels you pay per person and not per room.

In the words of the COO of University Town Islamabad : ” Islamabad is a market with which we are excited and in which we are working to lay a foundation .”

In addition, another aspect that could predict that this type of low cost hotels in Spain is a success is that this business model has lower limitations for its growth and expansion, since only plants and not complete buildings are needed for tourist accommodation , obtaining more opportunities for location, variety and interest.

With the rise in Spain of new hostels and hotels born from the demand of people under 35 in search of new adventures, but who need spaces that ensure quality and good location, OYO has had a new commitment to Europe.

Since last year, OYO had announced its entry into the United Kingdom with an investment of 40 million pounds , of which the presence was obtained in approximately 50 hotels with a capacity of one thousand rooms.

In the portfolio of this famous hotel chain, travelers can find different value offers under the names of OYO Rooms, OYO Townhouse, OYO Home, Silverkey, Palette Resorts, Collection O, Capital O and OYO LIFE, in order to give them These people the best stay in any city in the world.

For its part, OYO Rooms established as part of its expansion plan to Spain, setting Oriol Maresch, former Director of Development and Operations of Best Western, and Irene García, former Husa, for the development of the business in this country.

According to reports, OYO already has more than twenty hotels in this Eurozone country , Barcelona being the city with half of its hotel projects underway corresponding to hostels, pensions, hostels and tourist apartments.

How is OYO different from other competitors?

With the focus on revitalizing local businesses without seeking to replace them, and as we have already mentioned, OYO has a very clear mission: to optimize real estate assets in order to offer satisfactory experiences to guests.

To this end, they have the purpose of training the owners of small and independent hotels, because, by adding a hotel to their list, this hotel chain is in charge of analyzing it thoroughly with its technology to ensure that it meets the requirements to be part of OYO.

This technology is based on artificial intelligence (AI), which is applied to the hotels with which OYO operates. This tool allows them to manage everything that has to do with the space, such as sales channels, customer requests, reservations or finances.

As a result, you get more income and better experiences for travelers.

By ensuring a good quality, price, location, these hostels are given the possibility to improve their performance and thus compete, even with the largest, so that travelers do not have to choose between any of the three options, but they would see in a space the three characteristics they needed.

Therefore, what differentiates OYO from its competitors, is that it offers accommodation with standardized quality criteria at affordable prices, and its focus is not only travelers, but also owners.

There is support for the owners of these independent spaces to make their local businesses prosper, and that is why OYO is a key part of their process.

Finally, and from an operational perspective, what differentiates OYO from its competitors is its comprehensive support. With this model, they manage to identify strategic spaces to ensure that they enter their portfolio before others get ahead of them.

 

The Secret of OYO

OYO’s secret is based on the fundamental pillar of a focus on small, economical and independent hotels that many might think are not profitable for the most demanding travelers.

They took into consideration that between 80 and 90% of all hotels in the world have 100 rooms or less, and instead of discarding their main idea, they understood how to deal with this type of business in a profitable way.

OYO understands that people change, so the behaviors and needs of travelers too, so the chain has a multi-brand approach to cover, in essence, each of these needs detected.

The key, therefore, has been to revolutionize the concept of economic accommodation, from which it was detected that its segmentation was highly fragmented as many of these hotels were inherited.

Therefore, its expansion has been due to the offer they have given to the owners of these small and independent hotels of technologies and operational capabilities to compete with the large chains in order to increase their occupancy.

Keys to the rapid growth of the company

 

After understanding OYO’s mission and vision, the following can be identified as the keys to success for its unprecedented growth around the world:

  • OYO’s main challenge is to offer a personalized quality experience according to the needs of each guest.
  • It has a model capable of adapting to the culture and custom of each region, and so they achieve a personalized experience. So in countries like the Philippines for being characterized by having many Christian devotees, there are bibles in each of the rooms.
  • It has a comprehensive support that allows them to add strategic properties to their portfolio that meet OYO requirements in a period of time less than the competition.
  • It is fast in terms of the design and engineering of the spaces, and they have the specialized team for that.
  • Its action plan has sufficient coordination to offer customers the best experience while improving the performance of the hotels in question.
  • Its ease of standardization of services comes from a technology that offers these solutions.

Future Objectives

Having the purpose of creating quality accommodation spaces around the world, the company decided to acquire Leisure Group, a private holiday accommodation company, as they have seen in this a great growth opportunity. And in fact, they have achieved it.

With this acquisition, OYO is present in more than 24 countries, including India, China, the United States and the United Kingdom.

According to OYO, Leisure Group has a business vision similar to yours in terms of managing room rentals for tourists, so the goal is to use this as a platform to become the # 1 hotel business model in the world.

Therefore, the OYO Operating Partners Group has been created to ensure the growth of Leisure Group in Europe and other markets, in order to guarantee the benefits that can be obtained from this plan.

On the other hand, OYO has also acquired Weddingz.in as part of its plan to offer customers a valuable platform for organizing a wedding at the destination of their choice.

In 2018 Novascotia Boutique was acquired to debut in the category of apartments with certain services, which was later called SilverKey, all with a view to growth.

Among its future objectives and in the words of the CEO of OYO Rooms, Ritesh Agarwal: “we seek to enter the 20 largest mature markets in the world. In addition, these are multipurpose markets, as is the case in China and the United Kingdom, through which we can become the largest hotel chain in the not too distant future. ”

 

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Conclusion

As Marketing Director of Sky Marketing , it is necessary to understand the new practices of those companies that are leading a new business model such as OYO.

Its key has been to focus on the needs of travelers after identifying them, and, accordingly, make a list of requirements so that certain properties can enter their portfolio.

Its technologies and integral supports have been the key for this company to be above its competitors, and its augury is that this brand becomes the number one option for tourists around the world.