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Offering customers a predictable, affordable and accessible experience’

Monday, March 06, 2017

Ritesh Agarwal, Founder & CEO, OYO

Ritesh Agarwal is the founder & CEO of OYO which is the largest branded network of hotels in India. The 22-year-old started travelling across India when he was 17 and stayed in more than 100 bed and breakfast hotels, guest houses and hotels and realized that the issue of affordable quality hotels was huge in the Indian hospitality sector.

OYO started with one hotel in Gurgaon and within a span of two years it is now present in more than 180 cities with over 70,000 rooms in its network. It is one of the fastest growing start-ups and is expected to be a next start-up unicorn according to a research by CB Insights, published in The New York Times. Ritesh was selected for the Thiel Fellowship in 2013 and he recently graduated from the prestigious program started by PayPal founder, Peter Thiel. He is the first resident Indian to do so.

In conversation with Dominic Rebello, Ritesh reveals how with the help of his personal experience, he understood the problems faced by travellers and his vision behind starting OYO Townhouse, OYO City and OYO Captains.

What is the OYO business model? How did you come up with this concept?
OYO was launched in May 2013, to solve a problem which I personally experienced as a traveller. Even as a child I had ambitions to do something of my own. So even after joining college in Delhi I spent most of my time at start-up events and networks, trying to learn more about how entrepreneurs set up their business. Since I was interested in travel, and the budget hotel category was under-penetrated I created a website to list small hotels, bed & breakfasts and inns - making them more discoverable and accessible to travellers. To build this business, I travelled for over three months and stayed in over 100 bed and breakfasts, guesthouses and small hotels. At the end of it, I realized that the real problem for the traveller was not lack of awareness but lack of trust. Budget hotels did not enjoy customer-trust due to lack of predictability in the experience they offered. With OYO, we pioneered a business model that standardized hotel accommodation to offer customers a predictable, affordable and accessible experience. We took upon ourselves to identify, standardize and transform hotel rooms across the country and make them available to customers at affordable prices.

Starting with a single hotel in Gurgaon, OYO today is present in more than 7000 hotels in 200 cities, offering over 70,000 rooms. We have enabled over 40 lakh check-ins to date. Being present in 200 cities today, OYO is the largest hotel network in India.  

How do you manage consistent service and experience at your hotels?
We have a no-compromise approach towards guest experience. Our on-ground guest relations employees are available 24x7 to respond to our guests across the network. We use data analytics and data science to predict the best options for each user to enhance their experience. By creating a 360 degree view of the customer’s preferences and behavioral pattern basis their interaction with us, we are able to pitch the most relevant offers at the most ideal time to drive conversions and increase engagement.

Recently, we introduced OYO Captains - a unique concierge service to ensure hassle-free travelling and on-stay experience. Each guest who books an OYO receives the name and contact number of their OYO Captain a day before their check-in. Over 240 OYO Captains are now available in 5500 OYO hotels. Guest can avail hotels with these services by booking via call centre, app or website. This required massive technology, product and process overhaul but we did this to ensure that guests had on-ground support at OYO hotels. We have seen great impact with issue resolution time reducing from 30 minutes to under 10 minutes with the involvement of OYO Captains.

What are your plans for growth in India?
There is huge untapped potential in India. Estimates peg there are 20 lakh unbranded hotel rooms in India compared to just 1 lakh branded hotel rooms. We believe even this is highly under-reported. Unbranded hotels is a very fragmented marketplace and there is huge demand. So definitely there is a lot of growth we are targeting in India.

Specifically, western regions contribute significantly to our business and we will be further strengthening our presence here. We launched our first OYO in Mumbai in December 2014 and now we are present in 70 cities of Gujarat, Maharashtra and Goa. There are over 600 OYOs just in Maharashtra and over 1800 hotels in the West region. We believe the market has more potential and are looking into an aggressive hiring plan to double the headcount in the region in next 3 months.

This year we will also experiment with new formats in leisure travel since that remains largely untapped in domestic travel segments.

Tell us about the OYOCity hoardings that we are seeing in Mumbai?
I am glad you mentioned that! We recently launched an outdoor campaign called MyOYOCity. This is running across 8 cities in India - Delhi, Mumbai, Bangalore, Kolkata, Hyderabad, Pune, Lucknow and Ahmedabad. These are at high-footfall areas, for example, Peddar Road, Andheri-Lokhandwala Link road in Mumbai, Banjara Hills and Hi-Tec city in Hyderabad. The intent is to build a stronger local connect but ultimately what the campaign conveys is how every city is an OYO city. Wherever you go, you will also find OYO’s hassle-free hotels next door.  

You have recently launched “OYO Townhouse”. Tell us about the concept; how does it work?
The hospitality industry in India suffers from a major disconnect between demand and supply of quality living space, forcing travellers and city-dwellers to compromise on decision variables of location, comfort and pricing. OYO Townhouse addresses this gap by creating a perfect equilibrium between location, comfort and pricing using OYO’s proprietary technology and skilled talent pool of hospitality experts. We undertake complete operations of these units along with interior and exterior construction with a group of highly qualified architects and structural engineers.

OYO Townhouse is a brand new category of neighbourhood hotels that combine experience and value at a scale that has never been attempted before in the hospitality landscape. This is targeted at Millennials. OYO Townhouse breaks away from decades-old hotel industry templates. Every Townhouse is designed to complement its neighbourhood. This reinvention has resulted in a new kind of hotel that’s optimised for comfort, efficiency, convenience and affordability. Townhouse will operate as 25% hotel, 25% home, 25% cafe and 25% merchandise store – to deliver an all-encompassing experience to guests.
We recently launched our 4th Townhouse property and expect to launch in Mumbai soon.

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