How OYO Rooms redefines living spaces with technology

The blend of technology, leveraging virtually every living space available in a destination, is shaping up new ways of how and where one stays while travelling.

The evolution of accommodation options for travellers continues.  In addition to home-sharing and new offerings from hotels, apartments are being leased, refurbished by hospitality tech companies and then offered for stay to guests. 

So don't be surprised if an option to avail a "brunch" instead of the normally-offered breakfast, or counting 24 hours of a stay from the moment one checks in into a property, crops up.

What is propelling the emergence of different options for travelers?

"Hospitality and real estate are broken categories," says Ritesh Agarwal, founder and CEO of hospitality company OYO Hotels, with headquarters in India and China.

"There is a huge disconnect between demand and supply of quality living space, forcing travellers and city-dwellers to compromise on location, comfort, and pricing."

According to Agarwal, the team at OYO is using technology and talent to fix this socio-economic problem.

"(We are focusing on this) so that people and property are in perfect equilibrium. Our long-term vision is to standardize all forms of real estate such as budget hotels, apartments, guesthouses, and resorts," Agarwal argues.

OYO is backed by the SoftBank Group, Sequoia Capital, Huazhu Group (previously known as China Lodging Group) and other investors, and has so far raised around $450 million.

The team also acknowledges that since their approach to setting up a business is unprecedented, their business metrics are not easily understood.

"Globally, we’ve seen marketplace models pivoting from plain discovery to fully managed and leased services. The future is a brand with distribution and full management capabilities - OYO being a full stack hospitality company is at the forefront of this innovation," says Agarwal.

"The past two years have been watershed years for us, both in terms of business as well as expansion. We locked down our growth strategy with a razor-sharp focus on our '100% inventory with Exclusive' model while building capabilities for on-boarding 10,000 rooms every month.

"In the past 12 months, we have also introduced first of its kind innovative hotel categories like OYO Home and SilverKey [corporate executive stay apartments]," Agarwal believes.

"We are targeting 180,000 rooms by the end of 2018, capturing a 5% share of the Indian hotel market," he says.

"We will further continue our stronghold on the South Asian and South East Asian markets where we can help and empower neighbourhood hotels to emerge in the same league as the big boys of hospitality."

OYO has lent a new dimension to the legacy-driven budget hospitality segment in India by enabling standardization of services, amenities and in-room experience.

"The industry offers an opportunity of more than four million hotel and guest-house rooms in India and there’s a white space that exists in the economy segment," Agarwal says.

OYO currently has over 5,000 exclusive hotels as a part of its franchised, managed and leased chain, which are spread across 150 cities in India.

It also has more than 12 hotels on the OYO platform each consisting of 100+ rooms.

Similarities between China and India

He acknowledged that there's a dearth of quality living spaces at certain price points which offers a huge untapped opportunity in China.

"OYO hotels will be working towards empowering the country's hospitality industry by introducing its hotel brand and operating solutions for ensuring a seamless experience for both guests and assets while generating lucrative job opportunities for locals in smaller tier provinces," says Agarwal. 

Referring to the alliance and five-year MoU with Huazhu Group, Agarwal says the deal came around the time when OYO was focusing on transforming themselves into a full-stack hospitality company driven by technology and was focusing on exclusive properties.

Agarwal acknowledges that Huazhu Group's experience and expertise especially in managing large properties in multi-format models has supported OYO to accelerate their own growth plans.

The company is operating franchised and managed models in China, working with small and independent hotels. The network currently stands at 11,000 rooms, 270 hotels in 27 cities.

As for direct booking and indirect distribution in China, OYO is seemingly in the early stages, having registered a company last year.

There is no option of booking online directly via the company's website in China, but users can book directly by contacting the call centre of the company. 

A guest has to pay at the hotel directly even though booking can be confirmed by WeChat. OYO Hotels are also listed on Ctrip. Overall, the infrastructure to support direct online bookings or indirect distribution is still a work in progress. 

Re-engineering it all

OYO has worked on a variety of products and the list includes OYO Rooms, OYO Flagship, OYO Townhouse (based on the needs of the millennial traveller, every hotel is designed to complement its neighbourhood), OYO Home and OYO SilverKey.

Agarwal cites the case of OYO Townhouse and mentions that this concept breaks away from "decades-old hotel industry templates". 

"Every single element – from the breakfast menu to the booking process – has been re-engineered" for quality and value, says Agarwal. 

Agarwal describes OYO Home as the company’s latest home management product.

"We have unlocked over 2000 homes in India’s top leisure destinations, including Goa, Shimla, Manali, Pondicherry and Udaipur," he says. 

"Booking a hotel is not only limited to a leisure or business trip. At OYO, we're witnessing that millennials are opting to stay at a nearby hotel for non-travel-related reasons such as, working late and wanting to avoid a long two-way commute, partying out with friends and wanting to avoid driving or going back home late.

"Intra-city bookings account for more than 40% of our bookings in some of the Indian metros," explains Agarwal.

"We differentiate ourselves by taking ownership of the end-to-end customer experience, right from the search and booking process to in-room amenities, service-delivery and check-out. We map the customer journey to the smallest detail and providing moments of delight at each step," he says.

The company cites the example of their OYO mobile app. It enables guests to be in control. The app offers other functionalities in addition to booking rooms. These include room service for food and beverages, booking a cab, searching near-by restaurants etc.

There are more than 350 OYO's local representatives, called Captains, at hotels for fulfilling concierge-like assistance service. On the check-in day, the guest gets the details of captain for any local assistance, thus ensuring 24/7 on the ground support.

Super-powers

"With the help of internally developed 'Krypton' app technology, Captains engage with properties right from the time of on-boarding, training staff of the property, ensuring right asset quality and conducting weekly audits of the rooms ensuring OYO’s standards of hygiene and other promises are maintained," says Agarwal.

In the past five years, the team has worked on establishing proprietary capabilities ranging from technology to transformation and on-boarding an asset. 

"We have a 300-people strong on-ground team, coming from civil engineering, architectural and design background who have empowered OYO in transforming an asset within 3-14 days and on-boarding them at an even quicker pace, which is in stark comparison to the industry," says Agarwal.

"As a company, our focus is on guest experience metrics, organizational agility and building tech solutions to solve problems and enable a great customer experience."

"We've built technological capabilities to overhaul tedious processes like transformation and asset on-boarding making them swift and agile while providing a structural detailing to the value chain. Our sales workforce uses Orbis which is a business intelligence tool and helps them in understanding demand patterns in the area and basis this intelligence offering the right quote to different partner hotels." 

Also, the properties are run on the inbuilt OYO OS for ensuring efficient operations. The property management system is used to handle check-in, check-outs and make an adjustment to prices according to demand. The staff uses Krypton – an internal audit app to inspect hotels and assets and it also captures customer feedback which helps identify any experience issues. 

With the blend of technology and human service in place to serve the travellers, OYO is further expanding to meet the needs of its guests.

The company recently forayed into complete package solutions and introduced OYO Total Holidays.

"The plan is to deliver seamless holiday packages that guarantee standardized hotels at affordable rates, with an OYO Captain on location to troubleshoot right through check-in and check-out. This is the first year of such service offerings from OYO," says Agarwal.

The services are available across major leisure destinations in India, including Ladakh, Himachal, the North-east, Uttarakhand, Kerala, Andamans, the rest of South India, and Goa. These packages are also valid for international destinations including Nepal and Malaysia.

Besides food, hotel, local sightseeing and guided tours, the package further includes transport - flights, buses and cabs (both inter and intra-city).

"We also take care of VISA procedures for our guests travelling to international destinations," says Agarwal.