OYO business model - OYO's strategy

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OYO BUSINESS MODEL - OYO STRATEGY

 OYO is a company started by Ritesh Aggarwal which has the largest chain of branded rooms network across the world operating more than 23,000 hotels in more than 500 cities in 18 countries like india, china, malaysia, nepal and other. This OYO business model came as aggregator business model but the things have changed since 2018. OYO business models and strategies have a big role in success of oyo rooms. Further, we will know about the oyo rooms mission, oyo business model and strategy in this blog. If you are interesting to know about the oyo business model and strategy then keep learning to the blog.

Earlier, the company made the partner who have small hotel lease some rooms. Oyo rooms is a mixed business model of aggregator and franchisor. As the company made the partner to expand his rooms this process is still same because it reduce cost of making hotel which is very expensive but they invest some amount of money to improve the condition of rooms, so that they made the rooms look good and the people take good experience of rooms. This changing of model is to reduce operational cost and improve serviceability.The franchise model will provide oyo control of day to day operations and help to boost its intensions of improving the consumer experience and have a better repeat rate of consumer.
OYO aggregates hotels, and sell them under its own brand. Even this process is still same but Oyo's business model has changed its route to a new model.

Oyo rooms Mission or Focus

The main mission of oyo is to provide the good quality rooms under take-up room cost. They feel the customer experience as the customer experience is good then they will repeat to book again and again oyo rooms. So they provide fine washroom,wash basin,bedsheet and mattress to create great living spaces for common man. Normally, in hotel there is not a good facilities provided by take-up cost hotel for common man, they usually provide dirty room, bedsheet,mattress,washbasin and washroom. But the main intension of oyo rooms to provide clean living hotel rooms to the common man, also they checking check out of rooms. They make unbranded hotels in a branded ecosystem by providing their brand. They hire those hotel which are at a good location as near mall, railway station, airport, corporate hub. They has been made a mission of acquiring 50,000 rooms per month. Its main focus to provide predictability in customer so, they repeat for booking rooms by its good facilities.

Oyo Rooms - Is Aggregator or Franchisor ?

Company started to reducing dependence on grouping or aggregating model due to reports of frauds by few hotel owners which had led to huge loss for the company.It is also criticised on social media for poor customer service including quality of inventory in some parts of india. So, Ritesh Aggarwal decided to change its business model from aggregator to franchisor for good customer experience and prevention of malpractices.

Oyo Room's Revenue Model

Now, the company also makes revenue after the changing of aggrgator model to the franchise model. Earlier, the brand used to contract the hotels at a predetermined price and offered it to the customer at a take-up price. But this earlier model has been changed to commision based revenue model.

Oyo rooms charges 22% commission from its partners. However, this commission may vary by the brand according to the services they provide.

Oyo's Strategy to make largest chain of branded rooms

There are seven main strategies followed by oyo to become fastest growing chain of branded rooms in india and also across the world. These strategies made oyo to compete all the branded hotels like Airbnb, Taj, Carlson, Radisson etc. These strategies of oyo should really learn you that amazing and make it different from others. Let's know about the strategies of oyo which is applicable.

First strategy

Collection of light Assets : According to this strategy, they only hire those hotels which are small in size as they have 90% hotels under 100 rooms. When they give the brand name to the partner hotels then their hotel grow up due to quality, price, standardization and staff training which is provided them by oyo.

Second strategy

End to End Responsibility of Oyo for Customer Experience : Oyo take the responsibility for the customer experience as they help in booking the rooms of partner hotels. They provide these things to customer which help in booking of rooms-
- Ease of hotel search
- Ease of booking 
- Check in easy
-Check out easy
- World class experience

To make good customer experience they only spend about 3 lakhs for look&feel and upgrading the facilities of rooms.

Third strategy

Predictability brings repeatability : It means you get the same rooms which have seen on oyo app or website when you are booking for this rooms. Then the customer can predict that there will no fraud with them on booking rooms which makes repeatability of customers. By this they make the oyo rooms- affordable, predictable, available.

Fourth strategy

Technology for Speed and Scale : As the oyo have good technology that they make ease of booking. There is very interesting way of booking rooms on oyo website or app that is following-
by 3 click in 5 second room booked. This master stroke is the gift of technology. As it does not take more time to book a room. This technology has been derived to seeing the busy time of people and people can book the rooms without wasting time.
The company has established Department  of Data Science which is very critical. Company has made big fund on innovation for technology, internet of things, machine learning, artificial intelligence.

Fifth strategy

Focused team for acquisitions and expansion : The company has made a special team which only work for making partners in expansion of business. This strategy help in making partner in very short period of of time as compared to other company. This company takes only 8 days to make a partner and take 15 days to upgrade the properties through Crypton mobile app which is only used by the manager of oyo and their partners, signing of contract is also signed through this app.


Sixth strategy

Feedback to Feed Forward : By this strategy, a customer can give a feedback for bad management in oyo rooms which will improve by time. Also, if the hotel partner do not behave good with customer then the customer can register complain by calling oyo manager who will delisted the hotel and these hotel rooms will not be booked through oyo.

Seventh strategy

Lowest Attrition with Continuous Training : Oyo trains their staff for good behaviour to the customer. They has made 25 skill centres and 25 training centres. In these centres, they improve the skill of their staff and made them gentle. When oyo appoints a person then it checks that the person has some following things as:

*skill

*will

*hard work

*management skills

*leaderships

If the person has these things then they directly appoint them for their job but, these things do not have in a person then they are sent to skill and training centres.

Services provided by Oyo

There are following services provided by oyo rooms business model than just hotel of rooms to visitors:

* Hotel rooms
*Oyo flagship
*Oyo townhouse
*Smarter rooms
*Smarter spaces
*smarter menus
*studio stays
*Events and other long stays
*Commercial places
*Oyo wizard

OYO Room's Future

Oyo is fastest growing hotel rooms and it will keep on its growing in future. Though, this growth is at  a value, which will worth it afterward. Oyo has set it foots in the market as high forecast hotel network, which will change in near future as the cost might increases. But, now oyo has introduce  a new model of flagship which make chances that the same prices might be kept in near future as they are now.

Oyo has made its debut in other domains than just hotel rooms which able them to stay in market for long. Softbank has been a anxious bystander and has done prominent job in funding them twice. Oyo has a different strategy & working style in comparison to others. Oyo has very bright future in hotel market as no branded hotel can compete this.



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