OYO is a global platform that empowers entrepreneurs and small businesses in hotels with the power of precision technology, thereby increasing revenues and making operations smooth. There is availability of pocket-friendly, reliable accommodation that guests can book instantly.
The name OYO stands for ‘On Your Own’ rooms.
The Man Behind OYO
Ritesh Agarwal, is a college dropout and had a strong passion to start his own business and established Oravel Stays in 2012 as a platform for affordable accommodation listings and bookings. He had a vision at the age of 17 and turned Oravel Stays into OYO in 2013, changing the hospitality sector with a focus on low-cost and consistent lodging choices.
Journey of Ritesh Agarwal
Ritesh Agarwal was born on 16 November 1993 in Rayagada, Orissa. He completed his schooling at Sacred Heart School and later at St. John’s Senior Secondary School. His family used to operate a small pan shop in Orissa.
In 2009, Ritesh went to Kota with the aim of getting himself into the best IIT institutions. Later, he realized that Kota wasn’t the place for studying coding; hence, he gave up on his idea of becoming a coder. Having ample free time in his hands, he thought he could write a book. He focused on ‘Indian Engineering Colleges: A Complete Encyclopaedia of Top 100 Engineering Colleges.’ It became a hit.
When he was 16 years old, he was chosen as one of the 240 students to attend the Asian Science Camp hosted at the Tata Institute of Fundamental Research (TIFR) in Mumbai.
Agarwal tied the knot with Geetansha Sood who is originally from Lucknow, on 7 March 2023. They became parents to a baby boy.
History of OYO
Ritesh Agarwal was a frequent traveller and during his travel he used to stay in different hotels. His experiences in different locations made him feel the need for better hospitality services.
Thus, he planned out a standard lodging system that can provide excellent quality rooms, restaurants, staff, and other facilities based on budget estimates.
OYO’s mission is to assist hotel operators in improving business operations with advanced technology to increase revenue. The goal is to offer quick, seamless, cost-effective, and dependable lodging for visitors.
OYO business growth
- Since 2013, OYO has grown rapidly in India and is now available in 800 cities in over 80 countries.
- In 2015, the company launched OYO app which was expanded to 100 cities and crossed 10,000 rooms.
- In 2016, OYO expanded to Malaysia, its first region outside India, introduced dynamic pricing to capitalize on seasonal demand surges and special events, and hit the one million check-in mark for the first time.
- In 2018, company began its international operations into UK, UAE, Dubai, China, Singapore, Indonesia, and more.
- In 2018, OYO launched a customer loyalty program called “ OYO Wizard.”
- In 2019, OYO’s revenue increased dramatically to $951 million.
- In 2020, OYO has crossed 50 million app downloads globally, launched Sanitised Stays safety protocols for all its homes and hotels, and introduced Discover OYO, a low-cost new user acquisition engine.
- Currently, OYO has over one million rooms in over 43,000 hotels and provides access to over 130,000 homes worldwide through its Holiday Homes division. The business is currently operating under the name ‘OYO Hotels & Homes.’
How OYO Make Money?
1. Commission:
OYO collects roughly 22% in commissions from hotels on a monthly basis. Commissions could differ depending on the services provided.
2. Room Reservation Fee:
The fee taken by clients when booking a room or even a reservation is based on selected services. The cost of the room is charged as a small percentage of the price sum total of the hotel. If a room is booked for ₹ 1,000 a night, OYO would only be making a commission of 10-20% from it, which would be their total revenue.
3. Membership fees:
There are charges ranging from ₹ 500 to ₹ 3000 that are levied on all users subscribing to OYO Wizard memberships.
4. Advertising:
OYO also requires companies to pay for their advertisement to be on OYO’s app and website. This also generates a significant revenue for OYO.
5. Sponsors and Partnerships:
OYO also collects fees from sponsors and partners for advertising their brand on their platform.
6. Consulting Services:
- OYO charges for consulting and data analysis for partner establishments.
Partnerships
Some of the prominent partnerships of OYO are:
- Lemon Tree: In March 2023, OYO linked a partnership with Lemon Tree. This collaboration was expected to drive use of the latter’s banquet and event spaces across more than 40 cities in the country, including Delhi NCR, Jaipur, Kolkata, Lucknow, Bhubaneswar, Mumbai, and Pune, among others.
- SoftBank: In September 2023, SoftBank partnered with Oravel, the parent company of OYO. By working together, they launched the luxurious hotel brand Sunday in India, forming a partnership with SoftBank Japan.
- Khelo India: OYO recently collaborated with Khelo India Para Games 2023 in Delhi. It offered lodging for over 1500 participants in 45 hotels throughout the city. OYO, as an event management agency, was also in charge of catering and coordination for the games as part of a broader partnership.
Business Model of OYO
1. Franchise Model:
OYO targets budget hotels, guest houses and other hospitality properties for commercial partnerships, in which hotels and guest houses become rebranded into the OYO brands and standardization. Marketing and technology support are offered by OYO in return for either a commission or a fixed fee from the hotel owners.
2. Leased and Operated Model:
OYO leases properties and assumes complete control over their operations. Only then is OYO able to come up to high standards and assure uniformity in customer experience. From property management to customer service, it looks after everything.
3. Aggregator Model:
Originally, OYO started as an aggregator by listing budget hotels on its platform and facilitating bookings. This model involved very negligible control over properties; it was rather a platform that provided customers with budget accommodation vendors.
4. Standardization:
OYO standardizes the properties with which it partners to ensure that a certain level of quality is maintained pertaining to cleanliness, amenities and customer service. The result is brand trust and loyalty among customers.
5. Branding and Marketing:
OYO has reportedly invested a lot in branding and marketing to drive customer acquisition and create brand recognition. It doesn’t end with online marketing; it also comprises tie-ups with travel agents and loyalty programs.
6. Customer-Centric Approach:
OYO works towards giving its customers a better experience through its App, Website, and customer service channels. This helps in customer retention and repeat bookings.
Conclusion
Despite many struggles, this startup OYO got successful. The story of its journey inspires a lot of many small startups in India. It has grown beyond the bounds of India and hotels. Ritesh Agarwal, at the moment, has 30% of the profits of Oyo Rooms, which is one of India’s most gifted startups.