A Detailed Study of Disruptive Technology Analysis for OYO

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The disruptive technology is known for altering the way of the operation of industries or businesses. It allows or forces ventures to change their course or approach of business. Because of the fear of losing their existent market share or being irrelevant with time. Many sectors are showing disruptive technology, and they are ride-sharing and e-commerce.

Talking about the hotel industry, here we will try to explain the disruptive technology by taking the example of OYO:

OYO:

OYO is one of the fastest growing hotel businesses around the world. Established over five years ago, the venture is a trusted partner for 10,000 hotels in Asian countries and operating for over 4,00,000 rooms. They started their business from India and is gradually expanding it to China, Nepal, Indonesia, Malaysia, and UAE. Their investors are Sequoia, Softbank, and Lightspeed. The company is targeting new markets of UK for their further alliances.

The UK is known for one of the popular destinations for traveling around the world along with domestic travel. The destination is best for OYO as they cater to the independent and unbranded hotel, with the massive demand for a budget accommodation and high online booking penetration. OYO adds value for both users and owners through their unrivaled technological partnerships, operational expertise, and affordable pricing.

Filling the gap:

According to the RedSeer report, the mid-segment hotels in Indian market size is $4billion for which the affiliated chain hotels constituted about 35% for room rentals in the Financial year 2018. The same has been growing at a 17% rate annually from 2015.

The opportunity was recognized by OYO, and they started making their efforts in the directions. In the first year of their operations, the OYO is known for clocking a revenue for 32.86 Cr. And incurred a steep loss of amount INR 496.31 Cr. If compared with 2018, the top line has grown upto INR 415 Cr. But the losses are still standing tall at INR 360 Cr. Every year OYO say their revenue climbing upto 245% and their losses has marginally widened from INR 365 Cr to 360 Cr.

OYO has been India’s largest hotel chains with rooms of 173,000 under their management. On global level OYO us the world’s third largest hotel chain comprising of half a million i.e., over 18,000 properties owning their franchise in 500 cities across the globe.

Owning the funding of 1billion$ didn’t add up in making the journey easy for OYO. Although growing at breakneck speed, the venture faced many ups and son about the quality of services and properties, customer complaints and messed up reservations. The feedback mentioned above was for evaluating the partnerships, and the venture canceled their association with hundreds the following year. They started leasing properties and establishing them as franchises where they manage everything from staff, kitchen room, and hotel lobby.

OYO Franchise Model:

The full-stack franchising and leasing model have given OYO full control over their client’s experiences. The model for being fully functional and intensive allows following the entire recruitment cycle for the service staff. The training, retaining, monitoring and hiring of services staff as per the OYO norms were desired. This is the time when OYO set up the “Skill Institutes” for training staff from scratch to ensure the quality of service for maintenance and housekeeping remains constant.

New Initiative “Skill Institutes”

The OYO first 25 skill institutes were set up a bit late in 2016. Till date, they have hired about 10,000 young professionals from specialized skills to serve for maintenance and housekeeping.

OYO Software’s and Team:

The OYO venture employs more than 700 software engineer and a total workforce of about 8,500 in number. Their robust engineer teams are known for releasing about 20 brand new softwares each day. It includes many new mobile applications and various updated versions of existing applications.

The ORBIS is one of the effective applications of OYO which can instantly calculate any hotel revenue and occupancy rates post joining OYO. The traditional hotel chains take about 10 to 11 months for signing with the franchise or the management contract deal with the property owner. There is no hierarchy in OYO affiliated hotels. The ORBIS on their phone is their boss floating the conventional instructions to them.

The ORBIS can calculate the risk associated with the deal and is built for taking decisions to approve the property for moving ahead or not. After signing the agreement with OYO and renovating the property as per OYO norms. However, the hotel owner can download the application and can handle everything from housekeeping to bookkeeping to inventory management through OYO dedicated apps.

The official website of OYO is equipped with the booking software to analyze a large number of real-time data and can continue the calculation of the demand and supply situation. The software resets the room rates in the given area millions of times for optimizing the occupancy in a given day. At the same time, the local businesses for the hotels were also functional. The OYO application keeps track of human power and technology accordingly.

Wrapping Up

OYO is catering towards the European regions to expand themselves further and penetrate well in the international marketplace. They have built many robust technical platforms to avoid miscommunications and any issues hampering the client’s experiences while onboarding. Lastly, OYO has taken the course of disruptive technology to establish themselves in the sea of their competitors. They have set the mid-budget hotel facilities for the people who love to travel and can avail the esteemed facilities in less money.

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