- In 2019, OYO hosted over 180 million guests from 120+ nationalities. In December 2019, an average of 750,000 guests stayed at an OYO every night.
- Vyas foresees a faster recovery rate in the budget category of hotels as compared to luxury hotels from COVID crisis.
- “Travellers will travel shorter distances, increasing the popularity of road trips and in-city staycations,” said Vyas.
OYO Hotels is a name that has become synonymous with the hospitality market in India. Launched by Ritesh Agarwal in 2013, OYO franchises and leases budget hotel rooms pooled from independent property owners. At the time when OYO stepped into the business, the market was largely untapped with worth less than $7 billion. Since then, the hotel chain has become a huge marketplace for low-budget hotels, bundling hotel rooms from around the world on its platform.
In 2019, OYO hosted over 180 million guests from 120+ nationalities. In December 2019, an average of 750,000 guests stayed at an OYO every night. The firm is carving a niche in the global hospitality market too. According to App Annie Industry Insights, OYO was among the top three hotel booking apps globally in October 2019. It operates in over 800 cities in 80 countries including China, Malaysia, UAE and Indonesia. Through its vacation home business alone, the company offers travellers and city dwellers access to over 130,000 homes around the world.
To know more about one of the world’s largest hospitality chains, The Blue Circle spoke to OYO-India’s Chief Business Officer, Harshit Vyas, where he shared his experience working with OYO, the strategies adopted to mitigate the pandemic crisis and the future of the company.
Meet One of the Most Successful CXOs in the Industry
Harshit was one of the early members of the team that laid the groundwork of the company and has worked closely with Ritesh Agarwal including the team responsible for the company’s first launch in Gurugram in 2013.
From one of the company’s first five core employees to leading the foray into international business, Vyas defines his journey as extremely rewarding and enriching.
“Starting my career with an Indian hotel start-up that has today become a truly global brand is something I hold extremely close to my heart,” shared Vyas.
He was instrumental in taking business to the international circuits, starting with Malaysia, with the responsibility to set up a team of local nationals, testing out various business models, and building relationships with the country’s asset partners. The directions to Vyas were clear – understand product-market fit, build a strong team, and set up processes that can scale with a strong foundation setting from the brand and social media perspective.
Cut to November 2019, after playing a crucial role as the head of the Western region, this young and promising leader from Bhilwara, Rajasthan was appointed as the Chief Business Officer- India, and is responsible to drive execution of all business metrics including supply, demand, and operations.
Impact of COVID on the Hospitality Sector
The pandemic induced lockdown has dealt a blow on every industry across the world with travel and hospitality being among the worst hit. People staying home and guests not walking through the doors has meant disappearing revenues.
“We, at OYO, are not immune to this and all businesses have been impacted alike. I believe that as the lockdown has been relaxed across some parts of the country, we are seeing early signs of recovery,” said Vyas on the impact on OYO hotels.
He foresees a faster recovery rate in the budget category of hotels compared to luxury hotels as the unprecedented crisis has forced people to save money. More so in the middle-class segment that holds a significant proportion for this category of hotels.
As the COVID-19 has changed the way we travelled forever with safety and social distancing becoming the priority, OYO has rolled out initiatives like ‘Sanitised Stays’. The program is aimed to enhance preparedness for a virus-hit world, implementing higher hygiene standards, minimal contact service, and enhanced credibility.
While all segments of the hotels have been affected, the small and independent hotels have suffered the brunt of the pandemic. As the expenses rose and revenues plummeted to a record-low, many have been forced to shut shop while making survival for the remaining really difficult.
Vyas said that many of these players are increasingly looking to partner with hotel chains like OYO, who ensure their preparedness to bounce back and support them with some form of financial rebates.
“In the past few months since the lockdown, we’ve signed a good share of new properties with no physical meetings. In challenging circumstances like this, we are working alongside our partners to improve business by innovating our partner-oriented products,” added Vyas.
On how OYO is managing the liquidity crunch, he said that they have reduced all controllable costs for now. Every crisis leads to a new-normal and preparing for that new world right now will help them come out of this stronger.
However, as per news reports, OYO has terminated its lease contracts with several hotels and laid off people as the business caught a cold. According to The Economic Times, the company also plans to offload more properties as domestic and international travel has come to a halt.
The Success of OYO Wizard
OYO’s program, OYO wizard has recorded 50% growth during the pandemic and 60% of its hotels on the OYO platform are already a part of the Wizard network.
OYO Wizard is a customer loyalty program, which has crossed the 7.5 million+ member mark as of 2020. The idea behind this program is to recognise and reward frequent customers and offer them benefits such as guaranteed discounts, cashback, discount coupons, and upgrades. During COVID-19, the company decided to extend all memberships by 4 months at no additional cost and contributed all proceeds from the Wizard membership purchases for April 2020 to the OYO Welfare Fund.
The OYO welfare fund was set up to benefit employees, asset partners and their staff members impacted by the pandemic or the consequent restrictions around the world.
“Even during tough times like these, this milestone serves as a testament that our offerings are in line with our customer’s requirements with flexibility & affordability topping the lists,” shared Vyas.
The Future of Hospitality Post-Covid
It is rightly said that crisis leads to opportunities and industries that make the most of these opportunities emerge as winners. For instance, World War 2 resulted in industrial shutdown across many countries but it also led to the rise of many existing and new industries that were quick to adapt to the situation.
Similarly, the travel and hospitality industries have evolved and become more resilient in the last decade and a half which helped them recover from 9/11 and SARS in the past. However, the current crisis is said to be the biggest of this century and the challenges are daunting, the biggest being the uncertainty of the timeline- no one knows when the world will come back to the pre-COVID level.
Vyas reckons that we have to learn to co-live with the virus threat, but with utmost precautions. The road to recovery for the hospitality industry depends on its preparedness.
“In the meanwhile, typically travellers will travel shorter distances, increasing the popularity of road trips and in-city staycations,” said Vyas.
Travelers will prioritise safety measures, opting for hotel brands that show visible signs of precautionary measures. The ready availability of sanitizers, staff wearing protective gear like masks and gloves, practicing social distancing, digital check-in, check-out and payment options, minimal touch for processes like room services will determine their choice of hotels.
‘’In India, we realised that relaxed staycations in small independent hotels will be preferred with the idea to enjoy time off but at the same time ensure safety and hygiene,” added Vyas.
This is likely to increase domestic tourism as people would look to explore hidden gems in and around their cities and towns. Enabling all of these requirements of a post COVID-19 consumer will essentially drive demand.
“We are confident that with all our efforts to welcome guests back safely once they are ready to travel again, we will come out stronger from this downturn,” concluded Vyas.
(Edited by Anu Choudary)
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