Playing the Long Game
India’s home-grown budget hotel chain OYO has entered 2020 with over a million rooms under its belt and a new determination to take brand OYO to greater heights
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Ritesh Agarwal, Founder and Chief Executive of budget hotel chain OYO, is an extremely contented man today. And why not? Today OYO is among the world’s leading hotel chains, serving millions of guests across the world including India, China, the United States, Europe, South East Asia, the Middle East, Japan, and beyond. The company has increased its year-on-year revenues three-fold and expanded its span over a million rooms across the globe by 2019 end.
“For OYO, hotels and homes will always remain the core business. They are the two areas where we continue to deploy a significant amount of our time, capital, resources and everything else,” says Agarwal in an exclusive interaction with Dr Annurag Batra, Editor-in-Chief, BW Businessworld.
Agarwal, who founded his company in 2013, talks of how OYO follows four critical mantras that are unique to the company and help create underlying value for it. “First, it is the ability to use technology. And to be able to predict at what location and at what price we should get into assets, i.e, the supply acquisition,” he says. “The second is our ability to renovate assets ‘quick and good’. Third, operating assets with efficiency while earning the appreciation of our customers. And the fourth is the distribution or yield management,” he says.
When asked to comment on the importance of the China market for OYO, Agarwal says it is one of the most important markets for his company. “Clearly India and China are our biggest markets across the world. Of course, Europe and the United States are our fastest-growing markets. But China is one of the most important markets for OYO,” he emphasises. But why is OYO so popular with the Chinese? “Our belief is the middle-income Chinese customer has an aspiration for a better lifestyle, better experiences, but without hurting their pockets. This is what we’ve been bringing to our Chinese customers. And we will continue to bring that to our Chinese customers this year too,” he explains.
So what would be different for OYO customers in 2020? Agarwal says customers are “at the heart of every decision”. He says emphatically, “We genuinely feel that our customers need three things better services, better locations and better prices.” If OYO does these three things consistently right, Agarwal believes OYO would create disproportionate value for its customers in 2020.
Commenting on the importance of his ‘asset partners’, Agarwal says he would want to ensure that even the last per cent of their asset partners continue to “appreciate, love and believe” in the OYO mission. “We have (in the past), and we will (going forward) work with our asset partners to create just that,” he tells us.
Recent news reports have suggested that OYO plans to restructure its operations. “One of the implications of the new strategic objectives for 2020, is that, like the leadership team, we will reorganise more teams across businesses and functions. And this means that, unfortunately, some roles at OYO will become redundant as we further drive tech-enabled synergy, enhanced efficiency and remove duplication of effort across businesses or geographies,” Agarwal had said in a letter sent to his teams across India and China.
“We brought over a hundred thousand jobs for young Indians, and we would like to bring a couple of hundred thousand jobs more,” he tells BW Businessworld. Agarwal firmly believes that his company and his team would continue to impact every locality they are present in, even in the year ahead. And finally, Agarwal wants to give back to the communities more than ever in the year ahead.