India’s Largest Branded Network of Hotels

Complete Analysis
 OYO Rooms : Branded Hotels, Affordable Stay
Introduction:
OYO Rooms, commonly known as OYO, is an Indian hotel brand that owns and operates as
well as aggregates standardised hotel rooms. It is India’s largest hotel network spread
across 180 cities with 6500+ hotels offering standarised and hastle - free stay experiences at
an unmatched price with home feel experience.
Oyo Rooms was founded in the year 2012 by its founder Ritesh Agarwal as Oravel Stays Pvt
Ltd but later in the year 2013 was changed to OYO. Operations for Oyo Rooms started from
Gurgaon with its first hotel and later spread to several cities and towns in India. Oyo Rooms
has extended its reach from domestic market to international arena with its presence in
Malaysia. Its headquarters base is at Gurgaon in Haryana.
Aim and Vision of OYO Rooms:
 Our goal is to change the way people stay away from home.
 Our vision is to offer the ‘OYO Rooms experience’ to every business, leisure and pilgrim
traveler.
Demand State:
Latent Demand : Identified the difficulties and needs of the people away from home and
explored the hidden demands of standardised budget rooms with easy bookings, check-ins
and check-outs.

Product Analysis:
Various Levels of Product
Core Benefits (A place for proper rest and sleep)

Basic Product (A room equipped with bed, lights, fan, washrooms etc.)

Expected Product (Standarised Services with hygenic rooms, clean washrooms, proper lights
and fans, clean bedsheets etc.)

Augmented Product (Complimentary breakfast, free Wifi, AC, branded toiletries, flat screen
TV, beverage tray, easy and clear policies, easy and fast bookings etc.)

Potential Product(Women’s exclusive hotel rooms, rooms for unmarried couples under OYO
relationship mode, OYO Township etc.)
 Basic OYO Room’s Business model
Books a part of Hotel’s inventory beforehand
(Oyo reaches out to 0-2 star hotels and even guest houses to partner with them or a hotel
owner can also reach out to Oyo)

Organise those hotel rooms under their brand name – Oyo Rooms

These partner hotels provide standardized service to customers of those rooms as decided in
a contract with Oyo

Bookings are made through the Oyo Rooms website, mobile application and other partner
OTAs
Oyo doesn’t own any of these properties instead invests in marketing and quality
improvement for the hotels under its fold. It’s a win-win for Oyo and the hotels as many of
them don’t have the network, knowledge or the budget for smart marketing, and they run
empty. Oyo helps them improve their yields.
Oyo Room’s services are particularly customized for budget customers but keeping in mind
their basic needs of wifi, clean linen, television, and air conditioners.
Oyo Rooms has positioned itself as a brand which cares about its customers and entertain no
compromise on quality. A special team travels and audits the services regularly so that the
set standards can be maintained. They also offers service training and qualitative supplies to
property owners.
Oyo doesn’t focus just on discoverability of the partners among the users but also on
the standardized quality of the services provided.
Product Differentiation:
 Standardized
Oyo Rooms promises to provide the same amenities and the same awesome experience
across all its rooms.
 Affordable
Oyo offers rooms at prices that no other player in the budget segment offers today.
 Technology Driven/Ordering Ease
They use pioneering technology to the hospitality sector to deliver better and more efficient
operrations, management, services and customer relationship management. A room can be
booked in just 3 taps, or within 5 seconds through their mobile application.
 Various services at a single platfrom
With its tie-ups with various other companies and platforms provides wide range of services.
Product Portfolio/Mix:
Oyo Rooms have a wide product portfolio which is updated time to time to cater to the
needs and demands of the various types of customers leading to product line stretch. It has
also co-branded with various other service providers like Airtel for Wifi support, Ola for
transport support, Biotique for in-room toiletries, Air Pegaus, PayPal and Mobikwik for
payments to increase its service base and for the comfort of the customers. It have multiple
product lines with varying depths:
 Hotel Budget Rooms
Oyo Rooms partners with hotels with the aim of providing standardized services including
free wi-fi and breakfast, flat screen TVs, spotless white bed linen of a certain thread count,
branded toiletries, 6-inch shower heads, a beverage tray etc. These services are available in
around 180+ cities in India and in Malayia. Budget rooms according to their price range are
divided into Standard, Premium, Elite rooms leading to the product depth of 3.
 Holiday Packages
Oyo Rooms offers holiday packages consisting of transport, assisted services and local
activities, besides stay across its leisure destinations. These packages are being offered
across Gangtok, Uttarakhand, Tamil Nadu, Goa, Himachal Pradesh, Kerala, Rajasthan, the
North East and Kashmir and among other tourism regions. It also provides special
honeymoon packages for couples. These packages differ according to the duration of the tour
and additional services along with basic that are in every package. Special activities
depending upon the package like river rafting in the Rishikesh package, trekking in hill
stations are also provided.
 OYO Welcomes Couples
To cater with the demands of young and unmarried couples Oyo provides budget rooms for
couples under relationship mode in 60% of its inventories. For promotion of their newly
introduced services they give discounts in the form of coupon codes but these offers remain
valid only for a specific time period.
 OYO WE
Oyo Rooms offers budget rooms exclusively for women travellers with all-women staff and
special amenities for women. Some of the features specific to these properties include
automated door locks, hair dryer, iron and full length mirror in rooms apart from library
with magazines for women, doctor and beauty services on call and cab services outside the
property. Currently this service is only available in Gurugram but company is planning to
expand the services to other cities in the near future due to the overwhelming response from
the targeted women travelers. They are looking at converting existing properties into OYO
WE brand, apart from signing new properties. These properties will be transformed in terms
of design and features. Considering the dismal state of women security in the country, and
increasing instances of harassment and violence, Oyo WE brand appears to be a much needed
offering which is appreciated by women travelers.
 OYO Townhouse
Oyo rooms as its newest product offers friendly neighborhood hotel targeting the millenials.
These townhouses will also be available to residents staying in the vicinity who can use these
properties as an alternative workspace and access them for their cafe, and their lounge and
retail store which will offer exclusive merchandise like apparel, toiletries, and stationary.
Townhouses operate as a hotel, community hotspot, cafe and merchandise store to deliver an
all encompassing experience to guests. Oyo is plannng to undertake complete operations of
these units along with interior and exterior construction. Townhouse also offer Netflix in the
rooms, smart multi-purpose spaces, and a bundle of other interesting offerings including
creative menus. Currently Townhouse services are there at three places and company plans to
launch 250 Townhouse properties with over 10,000 rooms across 12 cities in India by the end
of 2017.
 OYO Bazaar
Oyo Bazaar is a self-serve platform for hotel-partners to purchase goods and items
necessary for day-to-day operations. This platform ensures they receive easy access and
preferential rates to the most-commonly used goods such as bed-linen, electrical fixtures,
furnishings and lights – that add to the guests’ in-room experience. This ensures that Oyo’s
partners can fulfill all their hotel-related purchases from a single online marketplace. It is a
one-stop shop for hotels to procure daily essentials required to run their business, to boost
loyalty among its partners and maintain margins. Oyo is not planning to operate Oyo Bazaar
as a ecommerce company but to become a preferred supplier for our parteners and enable
long term value.
OYO Bazar currently have around 180 stock keeping units or SKUs in four product
categories:
 Linen with product depth of Six comprising bedsheets, curtians, duvet, pillows, towels,
covers. These also varies as per thread count and patterns making the product length
quite large for this product line.
 LED Lights with product depth of four comprising of bulb, street light, tube light and
panel light varies according to the surge making the product length to around 8 for ths
product line.
 Maintenance Services with service depth of three comprising cleaning, pest control
and repair at varying locations.
 Toiletries consist of a single product Oyo Toiletry Kit.
This business move makes good sense, because this will not only help their partner hotels to
procure standard quality material at competitive prices, but also help Oyo to keep their
margins, increasing their revenues and adding to their profits.
 Studio Stays
Oyo also provides fully furnished rooms and flats for long stays like internships, corporate
stays, etc. The rooms/flats can be rented on single occupancy as well as on twin sharing basis.
 Long stays
Oyo also provides services for various family functions (weddings, parties) as well as
corporate functions (seminars, meetings, parties) where guests need to stay for long.
 Oyo Flagship
Oyo Rooms lease hotels where it has the full control over the day-to-day operations of these
establishments. This is a shift from the existing model, which is proving beneficial for the
brand as it now already has a brand equity and a set of loyal customers. These leased
properties come under Oyo Flagship.
 Oyo Cafe
Oyo under the name Oyo Café aggregate kitchens from it’s own listed hotels and sell food
under its own brand name. Oyo Café works just a food supplier partnered with other food
tech platforms like Zomato or Swiggy to distribute the food for them. Every hotel in their
network that has a kitchen is a supplier of food, which is listed by a third party food delievery
platform/food tech platforms and sold to Oyo consumers. As most of Oyo partner hotel’s
kitchen have excess inventory. So the idea is a revenue generation potential for the partner.
 Oyo care
The company provides on-demand housekeeping and cleaning service called Oyo Care. The
Oyo’s existing area managers in various offer housekeeping services to rooms on demand
with help of their team.

The product length of Oyo is quite large.

The product mix of Oyo is quite consistent as different product lines are closely related to
each. Some products are even essence of their existing services in much more standarised,
ordered way and with some more inclusions. Various different product lines also have
similar distribution channels.

Future Plans:
 Oyo is planning to increase its network of leisure hotel rooms and it would also enter
fresh agreements with various properties to expand its inventory of rooms, Oyo is
planning to expand to around 8,500 hotels in its network by the end of 2017.
 The company is planning to expand to other businesses such as providing loans to hotel
partners for their financial support for which it is in talks with financial services
providers.
 The company plans to expand the online marketplace Oyo Bazaar to 500 SKUs by July
with more products such as cleaning supplies, crockery, bathroom wares and room and
kitchen appliances increasing their the product depth and length.
 It is planning to expand its footprints in South Asia and South East Asia.
 To strengthen its services Oyo is introducing a concierge service called OYO Captains.
Oyo Captains will be like concierge service who will ensure smooth travelling
experience and build personal relationship with customers. Each Oyo Captain will be
responsible for 30-40 properties in his locality constituting an average of 300-400 rooms.
People initially employed to do quality audit will be turned into OYO Captains with
additional responsibility of smoothening consumer experience. Customers can directly
reach out to OYO Captains for any complaints and guidance of the area.
 The company is finding ways to ease the tedious processes of check-ins and check-outs.
They are planning for easy walk-ins and walk-outs without manual formalities to provide
home feel. The integration of Oyo with Mobikwik is a positive step in this direction that
facilitates one tap online payment and no need of stopping to pay. This will maximise the
customer experince and will make services better.
 Oyo is planning to introduce early morning check-ins at 6a.m.

Improvements/Suggestions:
 Oyo should also provide overnight laundry and iron services as many a times customer
books a room for the night and has to wash and iron his clothes for tomorrow’s meeting.
 They can also work on providing 24 hour room service.
 As Oyo doesn’t buy all the rooms in the property but the hotel is standardized. So most
of the times when a customer comes in directly hotel owners sell their unsold rooms to
the customers and not the oyo ones as those rooms also have the same standards. Oyo
can work in this regard and maybe can only standardize that part of the property
bought by them.
 Along with expanding its business and numbers, Oyo needs to really pay attention to
customer feedback and reviews as it’s the service offering industry. Also it needs to
bring in more stringent offline quality control mechanisms on-board to manage
customer experience and keep the brand growing.
 As Oyo co-brands with many companies like Ola for tranport services, Zomato for food
etc it opens oppurtunities for new customers and channels. It has also increased its
volume of sales and reduced its cost of product introduction by partenering with various
companies. Along the whole path of co-branding Oyo has been able to keep its unique
brand image.

Impacts:
 Oyo through its unmatched services has become a brand in the hospitality sector in India
with its sight on the foreign markets. With its rapid growth and positve respone from the
customers Oyo is giving its competitors a hard time forcing them to think out of the
box and do something new , all efforts in the favour of the customers leading to better
and wide services to the customers.
 Oyo through its various services is also dealing with the societal problems bringing up
the companies image in a positive way. The introduction of Oyo WE and Oyo for
Couples were the steps towards the same. Oyo WE reduces the worries of women
travellers of stay making them more secure. Oyo for couples provides rooms to
unmarried couples too preventing them from the embarassment of being asked for
marraige certificates even if they are married. So, Oyo has a positive impact on our
society if these facilites are used in a proper by the customers.

Pricing Analysis:
Basic Revenue Model of Oyo Rooms
Oyo rooms books a part of the hotels inventory by paying monthly rent in advance at
discounts (Expenses)

These hotels are put to match the standardised quality like free wifi , clean toiles
etc.(expenses)

These rooms are offeres to the cutomers at Oyo rooms website, appplication and various
OTA platforms

Users buy these from at a predetermined price (revenue)

The expenses also incudes the heavy expenses on promotional activities to increase the brand
quality among the users as well as the renumeration of the employees.
It provides heavy discounts to the customers. These discounts often results in prices which
are lesser than the cost price of these hotels and resuts in losses.
Precisely Oyo Rooms is running in loss.
Despite heavy losses Oyo rooms is able to expand in the market as it is backed by several
investors like Lightspeed India, Sequoia Capital, Greenoaks Capital and Softbank Group.

The price sensitivity in this case is high due to high competition and customers are also
awared about different services and can easily compare the quality and price with its
substitutes.
Oyo Rooms refer clients to hotels and get a percentage as cut for 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 favour of the
company as they are able to realise their revenues at a faster pace.
They provide different services at different but definite prices. Budget hotel room prices
varies from rupees 999 to rupees 4,000 but a floor price is kept and the competitor’s price
according to their quality is also kept in mind. Leisure rooms are priced 15-20% higher than
business rooms, and 20-30% lower than the nearest three-star hotels. It tries to meet the
budget of an individual and set up his accommodation accordingly. Price of the rooms are
also set according to their geographical locations, categories and inclusions. Rooms at
tourism spots are generally high priced compared to a room in a general city.

Pricing Strategies and Adaptations:

Oyo is following the Value Pricing strategy providing quality rooms with standarised and
wide range of facilities at reasonable prices to meet customer satisfaction. This increases
their volume of sales.
Oyo to some extent also follows Going Rate Pricing(Competitive Pricing). According to
the competitors price it changes its own prices.
At the moment, Oyo isn’t charging any take up rate just to get most of the market share.
They basically earn exclusively from the volume of room nights sold. Just that the revenues
are split between Oyo and the property owner as per their agreement.
Oyo is aiming for product quality leader in the market for that they are even ready to take
some risks. They are just heading for maximum market share by setting the lowest prices.

Some additional policies and strategies are also followed for some other product lines:
 As for holiday packages the services are offered in partnership with local travel agents on
a revenue share basis. Price varies with the destination, duration of stay, no of persons
travelling, vehicle type, hotel category and various other inclusions. They also provide
special discounts in the peak seasons and on increasing the no of travellers.
 The owners are required to shell out Rs 1.5-2 lakh on their existing properties for their
conversion to comply with Oyo WE brand.
 The tariffs for Oyo Townhouse will be upwards of Rs 3500.
 For Oyo studio stays rents are paid monthly. Commission (take up rate) is charged
from the owners if the customer comes through oyo rooms.
 Oyo through Oyo bazaar provides inventories to hotels at prices that are 20-25% cheaper
than market rates while generating 20-25% margins for itself in the process. Oyo is
generating profitable margins through Oyo Bazaar but are still planning to expand their
services to cover more hotel partners.The minimum order value for products should
exceed Rs. 2000 to be eligible for making any purchases.
Discounts:
 Oyo provides heavy discounts on its every service. They at various places where the
volume of sales is low provides direct discounts like 10% off on booking upto a
particular date.
 They also provide corporate discounts.
 It offers premium discounts on its premium properties to increase their volume of sales
as premium rooms draw more revenues and profits.
 They have various seasonal discount policies like providing discounts during the on
season at hill stations or during any festive seasons for pilgrim places. Ex - Oyo giving
30% discount for those heading to Goa during peak season.
 By partenering with various other companies and platforms customers can gain
cashbacks , rebates or other rewards like paying with Ola Money on Oyo Rooms
customer can get a cab ride voucher worth Rs150.
 They are also planning for special customer pricing providing niche stay expereinces
like for interning students Oyo stay for months starting at just Rs7999.
 Special Event discounts by Oyo like the Check-In sale for particular time.
 Customers can also earn discounts by paying through Oyo money.

Challenges and suggestions:

 Low prices definitely become a factor of choice but to make profits they have to price
their rooms above the cost price in the future and this creates the problem of retainment
of customers.
 Challenges lies the way they will combine quality and price to become quality leaders
in their fields and alongside make profits and maintain the customer base.
 As Oyo have already established its brand name to some extent in the hospitality sector
they can use percieved value pricing for their future plans for the millenials.
 They can also focus on their quality and focusing on that information on the customers
to make them less consious of the price.

Impacts:
 Oyo as it follows value pricing providing rooms at low prices forces competitors to
relook their pricing strategies overall benefitting customers and as they can get quality
services at reasonable prices.
Place / Distribution Analysis:
Oyo acts as the merchant to some extent in the distribution as even if they don’t own any of
the property but rent them out on monthly basis and sell them under their brand name. They
decides all the prices and carry out negotiations(if any). They remain well awared of the risk
that their rented property might not be booked at some places.
They also have travel agents who monitors the standards of the hotels and look out for the
maintenance of their inventories. They also gather informations from the property owners
and can even act as a channel of communication.
Oyo is planning to introduce concierge service called OYO Captains who will ensure
smooth travelling experience and build personal relationship with customers becoming a
better source of information and feedback about the services. They can be reached out by
customers for any complaints and guidance of the area.

How to Book a Room?

 OYO Rooms can be booked in various ways including through the Oyo Rooms app,
through the www.oyorooms.com website and on phone by calling 9313931393. In
addition, one can book OYO Rooms through any of their partener online travel agents.
Oyo also serves direct customers walking in to property rented out by Oyo. Customers
have the option to either make an advance payment or pay at the hotel during check-out.
OYO Rooms has a simple cancellation process and policies. Call 9313931393 to
cancel the booking. Bookings made through app can be cancelled on the app itself. The
applicable refund amount is usually becredited within 3 working days.
 For booking holiday packages just fill your details in the mobile app after selecting the
tour package and then Oyo representataive will call you discussing various details
depending upon your budget and the servies you want to avail. Destinations experts are
their to help the customers regarding the queries and for setting up a perfect tour.

How to reach the Hotel?

There are many ways to locate your OYO:
1. On the app, tap on "Get Directions" on the "Upcoming Booking" card.
2. After a booking is created, customer receives an e-mail with the address of the property.
3. After a booking is created customer receives a confirmation SMS that has a map link of
the Oyo booked as well the address of the Oyo property.
4. Customer will also receive an SMS with directions to reach the hotel booked on the day of
the check-in.
There are about 10 vendors who have signed agreements with Oyo Bazar for providing hotel
supplies in a certain price range, maintain quality standards and deliver products to hotels on
time. OYO Rooms' preferred logistics partners or the vendors themselves take care of the
logistics. Oyo bazaar products are made available to the buyers through different sellers.

Oyo can be said to follow modern distribution methods reducing the number of channels.
It has atmost one channel. Zero on booking directly from their app or website and upon
booking from OTA channel levels rises to one.

OYO Mobile App:

Oyo rooms maintains its mobile app which promises a hotel room bookinng in just 3 taps
providing customers with a seamless experience from booking to check-out.
Oyo rooms app is the world’s first personal room service app that allows guests staying at
an Oyo to order room service directly from their smartphones. Avalible on android and
IOS platforms Oyo recives most of its booking through app now a days.

Improvements/Suggestions:
They need to focus on customer service to become a big brand image in the hospitality
sector.
They doesn’t disclose the hotel name and address to anyone publicly until you book it
which creates a problem for the customer. There are thousands of cases reported by guests
on Facebook and elsewhere wherein they were not able to locate the OYO property as they
did not disclose the hotel name and had half written address even after the booking was
confirmed.

Promotion:
To retain its ranking and perform way above the competitors Oyo focuses on the mass as
well as on digital marketing aggressively for lead generation and customer acquisition. It
is using all means of social media by targeting potential customers based on their interest,
behavior and other parameters which are readily available via digital marketing.

Various informative advertisements are rolled out by Oyo at regular intervals on various
platforms (TV, radio, Internet,website, app) to make aware of their services and to pass
information of their newly introduced product.
Various persuasive advertisements of Oyo Rooms can also be seen on various platforms.
These ads are visually more attractive and are specifically designed the way that they should
be liked by the customers. Various testimonials are also presented by various celebrities and
the happy customers of the services.

How much is spent?

Their TV Ads normally cost somewhere between 30 lacs to 3 crore per creative ad and the
kind of slots they run on prime time, the total Ad run budget land somewhere between 20 to
100 crore. Not to mention the radio, print media and online advertising budget. Oyo is
spending big bucks on online advertising especially on Google as well, estimated around
1-2 crore per month.

It has a strong presence in social media as its Twitter following exceeds 10,000 and
Facebook 3.6 lakh+ followers. Nearly 5 million apps have been downloaded with a high
percentage of active users.
Two years back targeted holidayers with slogan #OneForEveryone. It included eight short
films where customers expressed their satisfaction with brand Oyo. Films emphasised 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, Ola for
transport support, Zomato and Swiggy for food support and various others widening their
distribution medium.

To fast track its growth, OYO Rooms is organizing several campaigns on social media
platforms such as:
 Dubsmash Contest
 #AurKyaChahiye videos on Youtube.
 Father’s Day Celebration campaign, and IPL Final Verbal Combat.
 Jai Hind Contest featuring Bollywood actor Manoj Bajpai and Raveena Tandon.

Challenges/Improvements:
 Oyo has to find some way to create creative advertisements spending as low as possible
as high expenditure on promotions is also contributing for the next unicorn startup
running in loss.
 They should work on strengthening their digital marketin gthrough various social media
platforms.