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THE SUCCESS STORY OF OYO

BY -GROUP

1.GAYATHRI NAIR

2.SHILPA SANTHOSH JAYAKRISHNAN

3.ANJALI

4.KALAIVANI

5.AISWARYA LEKSHMI

6.AISWARYA S

BATCH -C
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TABLE OF CONTENTS

S.NO CONTENT PAGE NO

1. ABSTRACT 3

2. INTRODUCTION 3

3. FOUNDER OF OYO 4

4. MILESTONES OF OYO 4

5 SUCCESS MANTRA 5

6. BUSINESS MODEL 5

7. REVENUE MODEL 7

8. MARKETING MIX OF 7
OYO
9 CONCLUSION 9

10 REFERENCES 10

ABSTRACT
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OYO is India’s youngest, largest and fastest growing network of hotels transforming and
standardizing budget accommodation across the country - one room at a time.OYO provides a
customized and hand-crafted guest experience. It is headquartered at Gurugram in Haryana. It
aims is to become world's most loved hotel brand. OYO has more than 6500 hotels which offer
standardized and comfortable stay at an unmatched price.This article highlights about the OYO's
journey on how well the company has managed to establish their operations,the various
achievements of the company,the revenue model ,marketing strategies as well various factors
that contributed towards their success.

INTRODUCTION

Oravel Stays Private Limited, which is being traded as OYO is largest among the India’s
hospitality company consisting mainly of budget hotel chain with about 70,000 rooms in 700
hotels all over India. OYO does not own hotels and instead they partner with hotels and provide
the customers with best hospitality services of OYO. They focus on standardizing the hotels in
the non-branded hospitality sector.

OYO Rooms stands for On Your Own Rooms, headquartered at Gurugram in Haryana. It aims is
to become world's most loved hotel brand. In 2012, then 18-year-old RiteshAgarwal, from
Orissalaunched theOravel Stays, a website designed to enable the listing and booking of budget
accommodation. After three months of research in the hospitality sector, he transformed Oravel
to OYO in 2013.

The massive growth of the company is the use of technology to streamline the products for its
employees, customers and property owners. An app helps in managing the visibility, bookings,
customer requests, pricing, customer feedback and reccomendations and so on. Currently they
employ 700 technology expertise to drive the innovations. By 2020, it wants to hire another 2020
technical experts and also invest in technologies like artificial intelligence, machine learning and
IoT (Internet of Things).

FOUNDER OF OYO -RITESH AGARWAL

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On your own, well a little intimidating thought when you are 21, but not for this young man who
built a multi-millionaire start up on his own. Oyo stands for on your own and its founder Ritesh
Agarwal has shown the world that there is no limit to what you can achieve on your own if you
put your heart and soul into it.

Born on November 16th 1993 to well to do parents in Bissamcuttak area of Odisha, a

naxalstronghold,Ritesh was never that conventional student conforming to the set norms .He
always thought outside the box.Computers fascinated him and he borrowed his brother’s books
and learned to code and for the rest of his computer education there was Google.

Like all quintessential Indian family,Ritesh too was expected to get into IIT and packed his bags
and left for Kota. Weekends were special for him as it's then he would take off to Delhi to
interact with owners of start-ups. He soon realized he was not cut out for engineering. He being
an avid traveller found that travelling on shoe string budget was compounded due to lack of
budget hotels and this ignited the fire for him to start Oravel travels which later transitioned into
Oyo.

Hounded by all for not having a formal degree he joined the Indian school of business and
finance at Delhi and soon realized it wasn't his cup of tea. He dropped out of college He
concentrated on building a platform for budget hotels which were standardized. Dropping out of
college was a blessing in disguise as he was awarded the prestigious Thiel scholarship given to
drop outs who dare to dream and dream big.

Accolades and awards galore came his way ,of which Forbes 30 under 30 in consumer tech
sector ,top 50 entrepreneurs in 2013 by Tata first dot and business world young entrepreneur
award being a few .An inspiring personality, who made his millions on his own and gave the
world the Oyo advantage,RiteshAgarwal.

MILESTONES OF OYO

OYO started its journey in May 2013 with single property and later increased the number of
properties from 1st to 15 July in 2014.Currently OYO has partnered with more than 6500 hotels
across the nation. The company focused on strengthening their leadership team with the hiring
expertised professionals who helped OYO in their key decision making of the company. In 2016
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they won the Quest Experience Award for Best Use of Social Media for Customer Experience
(CX) Improvement and were a runner-up in the Hotelier India award for front desk
management. The OYO employees relentless commitment to high-quality guest experience has
helped them maintain a good momentum and become the preferred choice of accommodation
for the guests. They were able to crystallise their mission - Quality living at the right location at
the right prices - further. They are geared up to take responsibility for the repair and maintenance
of quality real-estate supply, which is the biggest bottleneck in the growth of the category.
experience, having managed over five million check-ins from Ladakh to Kanyakumari, helps us
understand both supply and customer concerns.They received an average Tripadvisor rating of
4.3. More than 100 OYOs are now listed in the top-10 hotel rankings* for their city (including in
Noida and Bengaluru).

SUCCESS MANTRA

Rithesh Agrawal owner of OYO group was a travel enthusiastic. Coming from eastern part of India, he got opportunity to travels in many coastal towns and later he

travelled to north India, where he explored hill stations and Himalaya’s.During this period he got opportunity to study about the hotels and mind set of guests and

consumers living there.

The main agenda behind OYO is to provide customers standard rooms at affordable cost. They make partnership with unbranded hotels and delivers minimum

standards like bed quality, cleanlinessquality etc.Customers can book their rooms through app or website and Oyo make sure that the hotelsare providing the customer

withwhat they promised. Technology of OYO groups are integrated. Their long term vision is make to make the biggest hotel team, with not just people but also

through technology.

Initially it was difficult for owners, employees and earn trust of investors make them believe that this is going to big business. In mid-June they started with

twoemployee and one hotel in one town Gurgaon. Now after two years OYO is the biggest branded hotel with 1000 hotelsemploying 1000 employee distributed in 35

cities.

Rithesh Agrawal believes that if oneshould start doing things early so that failure comes at early stage and from each failure onecan learn something new and apply that

for the betterment of the company. Recruiting a nice team is his another mantra to make things go easier. At an age of 21, coming up with a start-up and succeeding in

becoming second largest among its competitor truly explains his success mantra.

BUSINESS MODEL
Oyo Rooms business model was similar to the usual aggregator business model
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(Uber for x business model) but had the essence of the franchise business model as well. The
company used to –
1. Lease a part of Hotel’s inventory beforehand,
2. Organize those hotel rooms under their brand name – Oyo Rooms
3. These partner hotels provided standardized service to customers of those rooms as it was
decided in a contract with Oyo
4. Bookings were made through the Oyo Rooms website and mobile application.
The current operating model of Oyo Rooms is similar to what it was before. It’s just the
company doesn’t lease the hotel rooms anymore, but ask the hotel partners to operate them as
franchise. They have good brand equity and boasts a 100% increase in revenue to their partner
hotels.

Oyo Rooms is the largest branded network of hotels currently operating 12,000 hotels in 337
cities in India, Malaysia, UAE, Nepal, China and Indonesia. The company started off its
operations by building its business model around the aggregator business model but things have
changed since 2018.
Earlier, the company used to organize the partner with hotels, lease some rooms, and sell them
under its own brand. Even though the process is still the same, Oyo’s business model has
changed its route to a new structure.

The main focus, however, still is the quality of the service provided. Hence, to maintain the
brand image, they make the partners provide services at predetermined standards while they
make them more visible to their user-base.

 Oyo books a part of hotel inventory beforehand.

 Oyo organizes the booked rooms under their brand name.
 Oyo signs a contract with the hotels to provide standardized services to their
customers.
 The bookings are made through the website and mobile application.
 Then customer books rooms at predetermined prices by Oyo.
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Oyo does more than 15 million booking in last year and has an annual growth run rate of
approximately 400 billion every year.

From late 2017 Oyo changed its business model from being a hotel aggregator into franchises.
The shift was mainly to reduce operational costs and improve serviceability, the company said

REVENUE MODEL

When the business model changed from aggregator to franchise,, the revenue model has also
transformed. Previously OYO offers the users at a take-up rate by leasing hotels at a
predetermined price. Now it has been changed to a commission based revenue model.

Oyo rooms charges a commission of 22% from its hotel partners. However, this commission
does vary according to the services provided by the brand.

Oyo book hotels in advance and get high discount by hotel owners. Benefit to hotel owners is
they get bulk bookings in advance. Benefit to customer is high discount.

For example:

If the cost of 1 room/night is Rs.2000

Oyo rooms get 50% discount which is 2000*50/100 = Rs.1000

Oyo resells at Rs.1200

Profit to customer is Rs.800

Profit to Oyo is Rs.200/room.

MARKETING MIX FOR OYO ROOMS

Product:
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The main focus of Oyo Rooms was to bring a change in the hospitality sector with technology
usage.  It is an online aggregator of hotels and has become largest chain in India. 

It enters into a deal with hotels to offer standardized rooms by equipping it with complimentary
breakfast, free Wi-Fi, air-conditioned room, branded toiletries, spotless bed linen, flat-screen
television, beverage tray, shower heads of 6-inch and so on. A special team has been appointed
who travels and audits the services regularly so that set standards can be maintained. Oyo also
offers service training and qualitative supplies. It just takes 5 to 6 days for the company to add a
hotel to its network after sign-up and equip it with approved standards.

Place:

Oyo Rooms has become most trusted and preferred brand that offers online booking services at a
set budget. Oyo Rooms first started from Gurgaon with its first hotel and later spread to several
cities and towns in India. It now operates in more than two hundred and twenty cities and offers
services via six thousand and five hundred hotels in places like Kolkata, Chennai, Goa,
Bengaluru, Pune, Maneswar, Ghaziabad, Varanasi, Hyderabad, Mumbai, Jaipur, Gurgaon,
Shillong, Panipat, Durg, Shirdi, Delhi and Ahmedabad.

Its headquarters base is at Gurgaon in Haryana. It is easy to book a room online with Oyo Rooms
with the help of Mobile application also. They are registered in most of the travel websites that
offer online bookings like a Clear trip, hotels.com and Make My Trip. Oyo does not
have ownership of any of its associated hotels. It has invested in marketing and management
improvement of hotels under its brand.

Price:

Oyo Rooms is associated with budget hotels and its range varies from Rs.999 to Rs.4000. It is
backed by several investors like Lightspeed India, Sequoia Capital, Greenoaks Capital and
Softbank Group. The primary objective of setting up this company is to offer standard
experience at an unmatched price. It tries to meet the budget of an individual and set up his
accommodation accordingly.  Oyo Rooms refer clients to hotels and get a percentage as cut for
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this transaction. They also have deals for minimum guaranteed customers and can offer its
clients beneficial deals and discounted rates. All its transactions are swift-cash variety and it
works in favor of the company as they are able to realize their revenues at a faster pace. Oyo
Rooms have adopted a reasonable pricing policy that offers affordable rates and great services to
meet customer satisfaction.

Promotion:

Oyo Rooms focus mainly on mass marketing as well as digital marketing for further customer
acquisition. It has a strong presence in social media like Twitter and Facebook. Nearly 1.5
million apps have been downloaded with a high percentage of active users. Oye has organized
campaigns on social media platforms like #AurKyaChahiye videos which can be viewed
on YouTube, Dubsmash Contest and Jai Hind campaign featuring actors Raveena Tandon and
Manoj Bajpai.

Its latest campaign has targeted holidayers with slogan OneForEveryone. It includes eight short
films where customers express their satisfaction with brand Oyo. Films emphasis on diversified
expectations of customers and how the company is able to meet each and every one of them
successfully. It has entered into deals with major brands like Airtel to offer Wi-Fi support.

CONCLUSION

OYO Hotels aims to emerge as the world’s largest hotel brand by adding over a million rooms
globally in four to five years, despite of the various issues faced. Marriott is currently the world’s
largest hotel brand with about 1.4 million rooms. OYO aspires to overtake Marriott by 2023.
“We aspire to be the world’s largest hotel company built out of Asia with markets in India and
China. Currently, Marriott is the largest and we have a lot of respect for the company. We aspire
to be bigger than that. We have already built in the growth rate at which they have been growing
in the past couple of years to set our target for 2023,” said RiteshAgarwal, founder and group
CEO at OYO Hotels.
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Founded only four-and-a-half years ago, OYO has expanded from only 20 rooms and a single
hotel brand to 330,000 rooms across over 12,000 franchised hotels in seven markets, including
India, China, and the United Kingdom.

Besides India and China where OYO has the maximum number of rooms, the brand is present in
the UK, the UAE, Indonesia, Malaysia, and Nepal. It will enter more markets in the run-up to
2023, though Agarwal is tight-lipped about the next geographies on OYO’s radar. Leveraging
data is a tough challenge for Oyo because hotel owners are reluctant to share information. This is
a disadvantage for them when compared to those companies who produce their own data. The
battle for market share in the hospitality sector appears to hinge on the efficient use of emerging
technology and oyo is striving to be well placed for the same.

REFERENCES

https://qrius.com/oyo-revolutionising-hospitality-industry/

https://qz.com/india/1401293/oyo-how-ritesh-agarwals-budget-hotel-chain-became-a-unicorn/

https://ourownstartup.com/ritesh-agarwal-the-man-behind-oyo-rooms/

https://www.javatpoint.com/oyo-full-form