The success story of a brand 'OYO': International chain of hotels. The 7 strategical keypoints they hit-on perfectly! | Startup Bazaar
case study of OYO Rooms

The success story of a brand ‘OYO’: International chain of hotels. The 7 strategical keypoints they hit-on perfectly!

   OYO: A Case Study

Oyo rooms conventionally noted as ‘OYO’ is an extensive mark of hotels, and rooms at the international board. The countries sheltered under the brand are India, Malaysia, UAE, Nepal, China, and Indonesia. The workable and controllable number of properties under the company is more than 5 lakhs across the world wide we discussed.

Ritesh Agarwal, founder CEO of OYO native of Odisha, India who even went to London, United Kingdom but from a start was fascinated by the terminology ‘Entrepreneurship’. The opening and inceptive engrossment of this gentleman was truly ‘Travel’. What did cause the formation of OYO then?

In passing, one time he experienced living in a hotel that gave him anxiety and impatience due to the stained washrooms, washbasins. The condition of the mattresses and furniture gave a feeling of non- comfort. His presence as a user in the hotel was a little fuming because of such attributes he came across. This was the time the entrepreneur detected a problem in society and looked forward to fix the same.

He examined the issue crossing his age, and went for the accurate provisioned date analysis of how does customer behavior matters to a service provider company? The end-user frequency is one imputes on which the proceeding happenings matter and the rate of repetition depends. Ritesh studied over this concern, circulation and the theme, so today at the age of 25 the businessman is the owner of the greatest growing hotel- chains business. Shifting the look towards the rate of expansion, clearly, 50% of his business cases profits are from the neighboring country China.

What was the vision and mission of the company? Construction and design of an appreciable living expanse from the working class to the elite class. The prime enlightenment here was to please the common public by some striking and eye-catching hotel ministrations and resources. Gazing deeply at the choice of words, great living conditions and a common man differentiates from each other at various levels, but the dream was to panel both of these categories at a single board.

The chance was challenging on its own for Ritesh Agarwal, and more a competitor stepped-in in the year 2012 ‘Oravel’. The year was the one when OYO was not established yet but the aim was there. So, young Ritesh went to the different hotel sites of Oravel in Delhi offering his services to make their rooms more considerable for the customers, plus asked for the percent profit of their business. The decision-making for the owners was a tough one, but in the conclusion, Ritesh was allowed to make the changes.

The beginning of OYO as an emerger:

The stepping stone in the business of hotels started up from here, he started up to improve the condition such as rooms, bed sheets, toiletries and had put in much more effort. The only concern here was more than a profitable business it was leading to a high-priced situation for Ritesh, and he thought to gain his business model make it extensible and expandable with the usage of automation and computers. That’s how OYO was officially set and standardized in the market of conglomerates.

‘OYO’ abbreviated to ‘on your own, which targeted the youth or the public traveling on their room would rely on OYO. Gradually, the company reached the heights of towered business and revenue, rate of repeated customers went high. The operations and functionalities went quite smooth with OYO and the public relished the services.  As soon as the hotel owners realized the quick expansion of their models with the aid of OYO, more and more projects went to Ritesh and this is how OYO created a chain of properties.

For any business model to aim this level of opportunities in the market has to acquire its game plan policies at each level, OYO did the same.

Let’s discuss some of their tactics in the target market:

  • Asset Light Strategy– gained the list knowledge of the hotels in the country that were below a superficial level and were not renowned and thought of making them altogether in an ecosystem where they are identified by the public. Making the economic thing of India clear, the moment lay where most of the public wanted to stay in lower case and budget-friendly hotels. So, he thought of giving these customers a better quality experience that stays in their finances. His idea was to assist the hotels which were liabilities. So, the idea was not to build their possessed properties but to stand with the already built unbranded assets. This is often named as Aggregator Business model, which means they use of a brand name for an already existing product for the success of both.
  • Authority towards user experience- the responsibility of the brand i.e. OYO for the customer experience and behavior, the hotel owners need not focus on the particulars such as the maintenance. Also, went forward to govern the proficiency in hotel hunts and hotel bookings. The up-gradation of hotel room facilities are mentioned clearly.
  • Retention and persistence of the customers- for the users to be satisfied the conditions we mentioned above are to be supervised, and for the same cluster, managers were hired for the monitoring of the hotels on some of the prime factors such as electricity, water, toilets, food, WIFI and many more. This maintained a level of positive thought in the minds of customers regarding OYO which increased the retention and repetition rate.
  • Technology- generated his mobile applications for better hotel searches and bookings. The application was so efficient that with limited clicks and seconds you could boom your hotel. Don’t believe it? Try it now. Therefore, with the invention of technology in the business the workable ability got enhanced. For the same, a department of data science was also set by the company, and with this, their managers in each country use an internal application called as crypt on the mobile app through which he can test the rate of return, expenses, and earning of every hotel in that region.
  • Fixed and steady support team- a resolute operational team with the help of which new properties and strategic partners are being gained for business augmentation. The main and only focus here is to model brand new alliances. So, basically what we call a chain of hotels is managed by this team.
  • Response directed strategy- as of now, before the invention of OYO customer experience was neither heard nor any execution was made up to it. Today, we have OYO it works on your feedback if a hotel menagerie is not up to the mark, the customer could report and the hotel might be delisted from the OYO chains as well. The human component for the best execution here is very important and is managed very well by the company.
  • Lowest harassment with sustained grounding- for the best training of the employees, the company has over more than 25 skill institutes, the training centers. But for whom is this whole effort going on? It’s not for the better but the best experience of their users and less weakening of the brand. If in case a customer reports against any hotel faculty, the company brings them to join these skill institutes. That’s how the efficient working of the brand OYO is growing so rapidly.

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Other Resources:

OYO Case Study: History, Valuation, Product, Services & Growth




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