Leadership Series Fireside Chat Edition 3 with Mr. Gaurav Ajmera, COO India & South Asia, OYO Hotels & Homes

1. The Growth Journey of OYO Hotels & Homes: OYO started in 2013 with a single hotel in Gurugram, India and in less than 7 years it has become one of the fastest-growing hotel chains globally. OYO has a distinct mission of upgrading any form of real state and provide quality living space to its customers. OYO started with the affordable budget segment. However, over the last 7 years, it has forayed into Hotels, Homes, Co-living, Wedding, Workspaces, and now Vacation Rentals. With the acquisition of a landmark Vegas property, OYO has stepped into the luxury segment as well. Their international expansion began with Malaysia in 2016. Over the last 3 years through organic and inorganic acquisitions, OYO is currently present across 80 countries and 800 cities.

 2. Mantra for Entrepreneurial Success: One should create his or her path and have a belief in it. That belief will lead an individual towards success. For an organization to succeed, it must have a team of individuals with clearly defined and aligned goals to achieve. Think, Innovate, Try and Re-innovate is the process that emerging organizations and individuals should follow. 

 3. State of the Business and Factors Influencing Recovery: OYO is confident that it will recover faster from the current situation than other chains. This is because it has a diversified business with footprints across the segments of the hospitality sector. Also, it's presence in markets that are showing positive signs of recovery will help it to bounce back faster. From an industry, perspective recovery will be a function of demand type and asset type. Business Travel will see a U-shaped to a V-shaped recovery, whereas, leisure will see a prolonged U-shaped or swoosh shaped recovery. This can be seen in China which as a country has shown very positive signs of recovery. Their business cities are witnessing close to about 70% of recovery whereas nearby leisure cities are witnessing a lower percentage of the recovery. For faster recovery, the hospitality industry should focus on understanding the changing needs of the consumers. The following key points elaborate on the same: 

• The primary objective is to ensure the safety of the guest by taking care of the cleanliness and hygiene of the property. Keeping this into consideration OYO has come up with a zero-touch SOP and a sanitized stay promise which will guarantee safety for the guests. 
• Secondly, Oyo is providing increased flexibility of booking to guests. OYO has come up with the industry's best flexible cancellation policies along with booking extension. 
• Thirdly, Oyo has expanded affordable pricing and payment options for the guests. 

 4. Modifications in Safety and Health measures with Geo: OYO has kept the construct of the sanitized stay product the same across geographies, however, the intrinsic details are different. These are designed in a manner to match the local government norms.

 5. OYO’s Latest Introduction - “Voucher” : During the time of the pandemic, OYO has come out with a new product named “Voucher” that provides complete flexibility to the consumer about any future transaction that can be made on OYO’s platform. This new product was launched recently and the initial response from the consumers has been very impressive. 

 6. Change in Room Count across Geo: India, China, and Indonesia are the markets where OYO’s presence is massive. India, China, Indonesia, and the USA have been dependent on their internal demand. Thus, these markets will rebound faster in comparison to markets like Thailand, GCC countries, and others which are heavily dependent on international tourism. Markets have seen both demand and supply shrinkage due to COVID-19 which has led the hotel owners to close down their properties. The silver lining is that these properties have now started to open up, and it is expected that by September 2020 OYO will get back all the supply which they had in the pre COVID world. Post this OYO will be looking at adding more supply. This also will help the partners associated with OYO see faster recovery due to OYO’s diversified portfolio. 

 7. Pricing Strategy : OYO’s pricing operates on a machine learning algorithm. Leveraging this algorithm, OYO arrives at the most optimum price that they feel will be best suitable for the guest and at the same time provide a maximum yield to OYO’s partners. Post-COVID, OYO will be operating on two major philosophies: Dynamic and a self-adjusting forecast and elasticity sensitive model.

 8. Partnership for a #BetterTomorrow : As soon as OYO anticipated COVID-19’s impact in India, it started engaging with its partners to understand their expectations and to apprise them about the latest market trends. Post setting this communication and engagement set-up, OYO looked at developing new products that will help its partners. One of them is the Zero Touch SOP along with Sanitized Stays. Then they highlighted the importance of these products to their partners which will help them to recover faster in the future. OYO’s operations team also engaged with their partners on training them on the importance of hygiene and cleanliness and how to carry out sanitization. Looking at the longer-term scenario, OYO understood that the physical touch will always be a concern for the guests. Thus it developed a remote on-boarding platform for its partners. OYO is also leveraging its strong connections with OTAs, GDS, Offline players and their brand to bring about faster recovery. In the coming time, we can see OYO getting involved in many campaigns across these players to ensure faster recovery for its partners. 

 9. The Dynamic Landscape of OYO: OYO has firmly believed that there is enough demand to go around, and with their apatite to grow they see demand as a lagging metric in comparison to supply. Therefore, OYO has always followed an omni-channel approach where they work closely with GDS's, have strategic tie-ups with top OTA's globally, and have a set of the off-line and on-line brand channels. This approach will continue for OYO and they strongly believe in opening up additional distribution channels for their partners. OYO is also utilizing Google My Business to draw demand through this channel along with other long-tail OTA's. 

 10. Employee and Stakeholder Motivation: OYO has been maintaining a high level of interaction with its employees. Their Human Resource team has been successful in launching multiple employee engagement initiatives like Skip Level Connect, Virtual Family Day, and others. They started OYO-VERSITY to up-skill their employees. As OYO is now looking to open up, it is taking every necessary step to ensure the safety and health of its employees at the office space. 

 11. Innovations at OYO: Innovation has always been at the heart of OYO which has been led by Ritesh Agarwal, Founder and CEO at OYO Hotels & Homes. OYO lays a dominant focus on carrying out surveys, their belief lies in the feedback that they receive which further helps them innovate. This innovation is not for anything but the only fact that it solves the root cause problem. They believe in learning from markets and then coming up with innovative products that can help solve these problems. 

 12. Super-hit Vacation Rental Product along with Homes by OYO: OYO perceives Vacation Rentals as altogether a different class, and in the times of pandemic, it has helped OYO see signs of faster recovery. For OYO a 200% increase in booking has been seen for Vacation Rentals from April 2020 to May 2020. Consumers are now preferring Vacation Rentals over any other stay type as they feel that it is much safer and provides private space. OYO has a decent supply of Homes in India and the initial focus will be to see how the product shapes in the post COVID world. 

 13. Townhouse by OYO: The townhouse is a boutique product for millennials. The occupancy generally stays as high as 85% across the year. Once the market opens up, OYO expects a faster recovery in this segment in comparison to other segments as Townhouses are affordable for the services they provide. 

 14. CSR Initiatives: During the time of crisis, OYO took a stand of giving back to society. They engaged with 15+ embassies to ensure that the tourists which are stranded due to the pandemic are given a stay. On a global level, OYO offered free room nights to healthcare workers which received recognition from the US presidential office. Supporting the Indian Government’s VandeBharat mission, OYO is providing affordable housing to all the Indians coming back from foreign countries. In the last 4 days, OYO has engaged with NGOs like Jagorani, Live N Give and others to provide a nutritious meal for people in need. 

 15. OYO's take on Packaged Food versus Cloud Kitchen: Not all the OYO hotels provide food but every OYO Hotel provides breakfast. Currently, OYO is closely following up with the idea of serving packaged food or having a cloud kitchen.