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OYO Rooms
Tagline
Net Worth
$1,100,000,000
Started in (City)
Gurgaon, Haryana,
Started in (Country)
India
Incorporation Date
01st December, 2013
Bankruptcy Date
-
Founders
- Ritesh Agarwal
About
On Your Own Rooms, commonly known as the OYO Rooms is a hotel network which was founded in the year 2013. On a lesser known note, the company is owned by Ritiesh Agarwal, an Indian. The fact that the chain offered affordable pricing was so unlikely of the rest in the market that there were rounds for a few years that the company might have originated from China.
This mantra of success to be cost efficient was very well taken by its country. With the aim to become the world’s most loved hotel brand, it started with just one hotel of its kind in Gurugram. The idea developed in the founder from his massive dearth for affordable decent rooms while he was travelling across India at the age of just 17. The birth city Gurugram is also where the company currently headquarters itself.
The concept of OYO is not to build hotels but to tie-up with them or sometimes even rent a few rooms from those hotels. The company manages the specific rooms or hotels itself to provide their services to the customers who chooses them. However, this simple idea required an unconventional deal of works for its implementation. The funding, marketing and reaching to the hotels isn’t as easy as it sounds. Coming from the experience of Oravel stays, based on the idea of Airbnb, OYO in its initial year was played very safe. After the launch, critical business advising was taken which was followed by the company tying up with a dozen of hotels to offer rooms to its customers. The quality, budget and availability issues of a customer that the founder Ritiesh had faced during his travel were fixed and it started building the company. Soon after the dozen tie ups, the team had increased from two to fifteen and later to twenty-five. The story took a leap when the company raised around 4 crore rupees from Lightspeed Venture Partners (LVP) in 2014. At a pre-money valuation later the same year, the company also went on to raise more than 14 crore rupees. It brought immense growth for the company as it was clocking a gross income of about 1 crore rupees per month. Since then, OYO has gone on to become India’s first technology-driven network of standardized budget hotels. It did not just stop at the success of their budget hotels but also expanded its network to the concepts of OYO Townhouse, OYO Life, OYO Homes, OYO Vacation Homes, Silver Key, Palette, Capital O and Collection O.
Beginning
In 2012, Ritesh Agarwal launched Oravel Stays to alter listing and booking of budget accommodations;, he renamed the firm to OYO in 2013.
OYO partners with hotels to allow similar guest expertise across cities. Shortly when launching Oravel Stays, Ritesh Agarwal received a grant of $100,000 as a part of the Thiel Fellowship from Peter Thiel. OYO presently has over seventeen,000 staff globally of that some 8000 square measure in Asian nation and South Asia. OYO Hotels & Homes may be a full-fledged edifice chain that leases and franchises assets. the corporate invests in capex hires GMs to administrate operations and client expertise moreover as generating around 1,000,000 job opportunities in India[18] and South Asia alone. OYO has additionally started twenty six coaching institutes for welcome enthusiasts across Asian nation.A college dropout, WHO once needed to take a seat for associate degree engineering communicating, Ritesh these days heads among the foremost valuable start-up by someone WHO ne'er studied on the far side faculty.
He even oversubscribed sim cards to survive, afraid his wealthy family would finish his entrepreneurial dreams and summon him back home to Odisha if they knew of his struggles.
In Kota(Rajasthan), wherever he was seemingly getting ready for his IIT entrance exams, Ritesh says he could not wait each weekend to slide bent on urban center and meet those doing their own factor.
This 19-year-old had traveled for months staying at budget hotels, attended client calls eachday and immersed himself in every doable expertise to find out concerning budget edifice customers and their expectations. That was the sort of on-the-ground learning that helped him pivot Oravel to Oyo.
Ritesh started his entrepreneurial journey once he was seventeen years previous. He born out of school and launched his 1st 1st Oravel Stays Pvt. Ltd. within the year 2012. Oravel was designed as a platform to change listing and booking of budget accommodation. Being a dedicated person, he before long realised that the budget cordial reception sector lacked foregone conclusion. Therefore, he pivoted Oravel to OYO Rooms in 2013 with the key proposition of giving cheap and standardized accommodation.
According to a look meted out by CB Insights for The big apple Times, OYO Rooms is among the businesses which will be consecutive start-up unicorns. the corporate is backed by investors just like the Softbank cluster, Greenoaks Capital, cypress Capital and Lightspeed Asian country
Ritesh Agarwal was elect for the “20 underneath 20” Thiel Fellowship in 2013. The Thiel Fellowship may be a biennial program whereby fellows receive $100,000 and mentorship from the foundation’s network of school entrepreneurs, investors and scientists.
Road to Success
The company is presently valued at $10 billion[20] as per the last spherical of funding. In September 2018, OYO raised $1 billion, of that the mythical creature filing for the quantity of $100 million raised from Star Virtue Investment Ltd. was created on thirteen February 2019. In February 2019, Oyo got $100 million from a Chinese company (DIDI CHUXING).In Gregorian calendar month 2019 – Series F funding of $1.5 billion crystal rectifier by SoftBank cluster, Lightspeed Venture Partners and cypress Asian nation.
Founder & chief operating officer, World Health Organization is additionally the world's second youngest have,[25] Ritesh Agarwal, through RA cordial reception Holdings (Cayman) in 2019 signed a $2 billion primary and secondary management investment spherical, supported by international institutional banks and his money partners, subject to regulative and investor approvals. Lightspeed Venture Partners, and cypress Asian nation, OYO's early supporters, ar marketing a part of their holdings so as to assist the founder increase his stake and thereby commitment whereas remaining invested with considerably within the company's long-run mission.
Challenges
This hospitality giant also saw some peculiar struggles in its growth. On its expansion to different parts of the world, it saw some major flacks coming its way. In 2018, the company got into controversies related to ethics in the field when it sent mass unsolicited offer emails targeting the mid-level and especially the senior level employees of the competitors. The giant also faced accusations of predatory pricing and claims that it did not follow its own agreements which included threatening the owners of hotels. OYO’s plans to implement a build a digital register mechanism saw no future as it was seen as a threat of privacy of their data which could have been shared with the Government. 2020 was no less than an earthquake on the empire outside its country. OYO China saw a downfall and had to lay off 72% of its staff. OYO Sri Lanka had to be shut down as it succumbed to the losses in the area. And OYO US which had earlier complained of flacks along with some countries of South East Asia will preferably also have to cut off a large majority after their furlough period ends.
Despite the unique concept of OYO, it does have a few competitors. Yatra, the online site and application that offers a booking service is a competition as they both enable the customers to book hotels and holiday packages. Fab Hotels is another competition and a slightly similar one as it is an aggregate site to bring all the hotels at one place for easier bookings. Treebo, MakeMyTrip and ClearTrip are among the other few competitions in the travel and leisure sector.
Airbnb is a platform that ties up with hotels and homes but its primary concept is to provide a new and unique experience and the company also does not strictly own or control any place which is listed, whereas OYO, does strictly control the places with its primary concern to provide a standardized experience to the customers. The competition lies in attracting the right audience for the show. The battle however shifts towards OYO as Airbnb reportedly takes 3% commission on each booking unlike OYO.
In 2015 the competition was on a rise and OYO was on a big competitive battle. The company still did not have much bandwidth to start on franchising and leasing models. The founder was reportedly found stating that the same would require more time and effort. The turning point towards the control can be seen in the early 2016 when the company decided to become a full inventory exclusive franchise. It was when OYO aligned with Marriott Hotels was when the idea to run as a full stack asset franchising was successful. This full stack franchising allowed OYO to take control over the entire customer experience. The complete intensive functioning including hiring service staff, training, monitoring and also retaining them was then on its hands. It started setting up “skill institutes” to train its staffs in order to ensure the quality of service and the consistency of maintenance. These institutes were set up in the late 2016 and since then OYO has spread to 199 different cities in just India. The success rate in its own country allowed the mid-market hotel industry to be established in other countries.
Failures
The efforts of building a highly-motivated team and strong management leadership saw downfall when the spread and established tie-ups did not go well with its technology. The employees claim that the technology wasn’t ready for such a big change and it led to several failures where the integration with local travel agencies did not merge with the hotel operation. Other than the hotels, OYO Life saw a different struggle altogether when tracks of keys went mismatched because of the software created. The lack proper capabilities to run so many businesses at the same time reflected in the administration. OYO began hiring way before it set up its operations, ultimately leading to framing of temporary contracts and later forced the company to cut salaries for a number as big as 50%.
As per the last round of funding, the company is currently valued at $10 billion. OYO presents a lot of takeaways that young minds can aspire from. Firstly, patience and perseverance. Success is not an over-night story. It takes years to build and sometimes also failed businesses. OYO kept faith in its concept and despite the fact that it had to change from Oravel Stays to On Your Own Rooms, it did not prefer the quitting option. For a business to conquer, the importance of leadership is an attribute that can be learnt from here. Having a mission in mind is just the first step but it only gets guided to glory by proper orientation. Lastly, the mentality to approach the right kind of audience. OYO’s concept was mainly based on giving affordable hospitality to the mid-class and that made the King’s story.
Achievements
- 4th Asean-India Excellence and Achievement Award 2019
- TiE-Lumis Entrepreneurial Excellence award in 2014.
CEOs
- Ritesh Agarwal