7 ms·

Oyo's business model is looking a lot like WeWork's

123 points by nocoder 7y ago

beilabs 7y ago
Oyo ventured into Nepal quite recently. From my viewpoint I see rooms often can be charged by the hour on some of their signage, not just daily rates. That's the type of visitor they are looking to attract.
- mav3rick 7y ago
  What's wrong with that ?
  - deleted 7y ago
    [deleted]
  - ryanlol 7y ago
    Nothing, some prudes just don’t want to stay in hotels where other people have sex. Odds are that the hourly-rate rooms would be on a different floor than the daily-rate floors for logistical reasons, which makes it even harder for me to see any problem with this. There’s significant a cultural difference here too, in the areas where Oyo primarily operates young couples need these rooms just as much as prostitutes.
    - mav3rick 7y ago
      So true about the young couples bit. Look up "Stay Uncle".
      - puranjay 7y ago
        They were on sale at Flippa a while back: https://blog.flippa.com/flippa-seller-showcase-stay-uncle/ https://blog.flippa.com/flippa-seller-showcase-stay-uncle/
    - lotsofpulp 7y ago
      > Nothing, some prudes just don’t want to stay in hotels where other people have sex. What you write may be true for Asia, but if you’re from the US, it makes sense to be wary of hotels offering hourly prices since it attracts a clientele that reduces the quality of life at the hotel. It’s not about being a prude, it’s the fact that hotels frequented by pimps, hookers, and drug dealers offer a less desireable experience.
      - CaptainZapp 7y ago
        What you write may be true for Asia, but if you’re from the US, it makes sense to be wary of hotels offering hourly prices since it attracts a clientele that reduces the quality of life at the hotel. After having a neighbor who thought it's a good idea to turn her rented appartment into an illegal hotel I'd say exactly the same thing, regarding quality of life, about Airbnb.
      - ryanlol 7y ago
        We’re discussing a Nepalese hotel, not a US hotel.
  - 9nGQluzmnq3M 7y ago
    Nothing, if you don't mind a constant stream of professionals turning tricks and their drunken clients marching through the corridors at all hours of the night.
- dmix 7y ago
  They were low end hotels before they bought them. Considering they own the whole property it’s not like this is a big deal like it would be for Airbnb (which is already used extensively for that).
  - notahacker 7y ago
    It's a pretty big deal if the theoretical rationale for your brand's existence is to offer a chain of budget hotels suitable for lower middle classes travelling on business and with their families, especially if you're tending to charge quite a bit more than the bottom end of the local hotel market.
- goatinaboat 7y ago
  rooms often can be charged by the hour on some of their signage, not just daily rates I wish we had something like that in Wales. Sometimes after a day in the hills I’d like a hotel room for an hour just to have a shower and change into dry clothes before driving back down the A470. Fellow Welshmen may mock me now, I’ve grown soft from spending too much time in England.
  - CaptainZapp 7y ago
    Check with local hotels. Hotels (alas mostly the business oriented ones) absolutely rent day rooms at reasonable prices if they have stock available. Just ask around.
  - TwoHeadedBeast 7y ago
    I was driving from Berlin to Skopje once, and at one point really needed a rest, having not found a hotel in Austria. In Croatia, I did find a place that I could rent a room for 4 hours so I could have a shower and a nap before continuing my journey.
  - rchaud 7y ago
    Would you be OK with this kind of flex arrangement if it meant that the hotel couldn't guarantee the state of the room or bathroom when you check in? Hotel management needs time to send cleaners to change the sheets and such after all. If booking is on an hour-by-hour basis like say a hotel meeting room, it isn't feasible to clean the place in between every booking.
    - goatinaboat 7y ago
      They could be in the process of cleaning even - I don’t need sheets on the bed or anything.
anon8123DF 7y ago
I was in Houston recently and was surprised to seen an Oyo-branded hotel, as I hadn't realized they'd expanded beyond being an aggregator. What do you know? 100% of Yelp reviews are 1-star: https://www.yelp.com/biz/oyo-hotel-houston-galleria-west-houston-3 https://www.yelp.com/biz/oyo-hotel-houston-galleria-west-hou... To be honest that actually makes them worse than WeWork at some level. WeWork may have an awful business model but at least its brand is (generally) known for consistent quality. [1] [1] https://twitter.com/jasonlk/status/1161659165619523584 https://twitter.com/jasonlk/status/1161659165619523584
- puranjay 7y ago
  The WeWork I work out of in Gurgaon, India, has the best coworking space I've ever used. They charge a big premium over other spaces but I'm happy to pay it. WeWork, I feel is a very viable business. Its obituaries are too premature. It doesn't warrant its $47B valuation, but it can easily displace Regus. Easily a $10B business, if not a $50B one. Which is incredible in itself
  - irq11 7y ago
    Except that they’re losing a billion dollars a year at that level of quality. Cut the perks to make it a viable business, and you’ll probably end up with...Regus. Markets are pretty efficient that way.
Traster 7y ago
>SoftBank Group, directly and through its Vision Fund, is heavily invested in both. This is the worst case scenario. Every company that Softbank tries to unload becomes a liability because of the association. On the topic of the actual business, I think there's a really basic question people need to ask themselves when they look at these business models: In 10 years time does the industry you're in look different? Because that seems to be the fundamental problem here, Oyo's business model is basically that in 10 years time nothing about Hotels will have changed. Well what does that mean? It means we know how much the end company will be worth because it'll just be some multiple of a basket of other similar companies that exist today. So here's the question: Why are they claiming to be more valuable than InterContinental Hotels Group whilst having 1/75th of the revenue? Now onto the financial engineering - overvaluing your company, borrowing using shares as collateral and then investing that money back into the company. That is a feedback loop, if you can't pay back the loan the shares are worthless and so these loans are entirely unsecured. If that's happening at scale, that is exactly the sort of behaviour that will cause a bubble and it will burst. Someone really should do some proper reporting on that - find out how common it is and particularly if it extends outside of Softbank.
- geodel 7y ago
  Softbank also invested in Flipkart $2.5B which till date is huge loss making entity. But they dumped that crap on to Walmart and made a chunk of profit. Else it would be another dent on this poor vision fund.
  - mathnmusic 7y ago
    Actually Walmart struck gold because along with Flipkart, they got PhonePe which is currently valued around 10B $: https://dailyfintech.com/2019/11/08/walmart-hits-gold-with-india-payments-as-phonepe-valued-at-10-billion/ https://dailyfintech.com/2019/11/08/walmart-hits-gold-with-i...
    - geodel 7y ago
      Ah, thanks for the link. I was totally unaware of this development.
deleted 7y ago
[deleted]
chewz 7y ago
[] https://scroll.in/article/940702/teenagers-electrocution-the-litany-of-complaints-against-oyo-rooms-just-got-a-lot-more-serious https://scroll.in/article/940702/teenagers-electrocution-the... [] https://economictimes.indiatimes.com/small-biz/startups/newsbuzz/from-oyo-to-uber-how-softbanks-100-billion-left-workers-in-a-hole/articleshow/72032747.cms https://economictimes.indiatimes.com/small-biz/startups/news...
9nGQluzmnq3M 7y ago
> For its core India business for the financial year 2018, Oyo reported revenues of just $61 million and a loss of $53 million. How on earth does this translate into a $10 billion valuation? For comparison, Hyatt's market cap is $7.9B, and they made $296M profit on $1,215M in revenue in Q3: https://s2.q4cdn.com/278413729/files/doc_financials/2019/q3/FINAL-Q3-2019-Earnings-Release.pdf https://s2.q4cdn.com/278413729/files/doc_financials/2019/q3/...
- aptwebapps 7y ago
  The valuation does not come from their operating numbers, core or otherwise. It comes from their last round of funding.
  - 9nGQluzmnq3M 7y ago
    I'm aware of that, but the valuation implies that at least the investors think there's a plausible path for the business to be larger than Hyatt.
    - braythwayt 7y ago
      When the valuation is based on investment by investors already in the deal... It does not imply that they think there’s a plausible path for the business to be worth the money. As events have shown with WeWork, it implies that they are maintaining the façade for a little while longer while hoping o get to the point where they can unload the business onto the public markets. Asking SoftBank what they think their investments are worth is like asking me what I think my house is worth. You Have to go by what arms-length investors are willing to pay. I really think we need a new rule where nobody quotes a valuation if the last round involved existing investors and/or founders pumping up the valuation with additional investment.
- puranjay 7y ago
  Hyatt should just call itself a tech company and increase its valuation 10x
oefrha 7y ago
Franchising, and buying up small hotels to form a hotel chain are both very old business models. So it seems to me that neither their original (basically franchising) nor current business model is innovative. What exactly does Oyo bring to the table? Seems even worse than WeWork.
- lotsofpulp 7y ago
  The valuable part of the franchising business model is ensuring a consistent experience for the buyer. That would involve spending money to hire a considerable workforce to continuously visit and evaluate every hotel. That would involve spending money and make it clear that the marginal costs of franchising hotels is not zero, and so it’s not worth the crazy multiples of revenue valuations that software companies are. All of these companies are an exercise in figuring out how to create plausible deniability to justify investing in it so that it can be dumped onto a greater fool.
anuraj 7y ago
OYO in India stand for poor quality. Neither do they have lasting assets other than contracts with Franchisees. Not a model built to last.
- runn1ng 7y ago
  In Vietnam, they vary in quality so much as to make the brand meaningless. There are good ones and terrible ones. The business model doesn’t seem to make sense to me either.
fastball 7y ago
https://www.profgalloway.com/unicorn-feces https://www.profgalloway.com/unicorn-feces
bengale 7y ago
I made the mistake of booking one of these OYO rooms in London recently. Seriously shocking they'd even try to claim it as a hotel, dingy bedsit maybe a better description. Would never book with them again.
leoedin 7y ago
Oyo are aggressively expanding. When I was in Nepal earlier this year they had OYO branded hotels everywhere. Since then they seem to have started taking over the super-budget hotels in London. I assume it's mostly the same hotels, but they've been paid to slap an OYO sign on the front. It's hard to see what actual additional value they bring though. They're not really a stamp of quality, and they're not generally opening new hotels, just rebranding existing ones. Booking websites are hardly a new thing - booking.com and hotels.com are pretty entrenched, and have the advantage that they index every hotel not just ones which agreed to put up the OYO sign. Maybe OYO will take a cut of the booking.com market (which from what I've heard is incredibly profitable), but by building an OYO brand with a reputation for budget low quality, they're moving in the wrong direction to do that.
- coredog64 7y ago
  Hotel chains have to share revenue with OTAs like booking.com. OTAs typically have agreements that they get the lowest public rates. Therefore, if you’re a hotel with enough online presence to drive demand, you can keep more of the money by having customers book direct via a loyalty program. One way to do that is a broad network that allows customers to always book directly with you.
- puranjay 7y ago
  The problem with Oyo, and its virtually most people who've used it (me included) will concur, is that the Oyo brand itself is tainted. Experiences are extremely inconsistent and the quality is all over the place. Hotels keep withdrawing from the Oyo platform because of non-payment of dues. Oyo's customer service is shoddy. This business should have been built slowly and carefully. But Softbank's billions meant that they expanded so fast and so soon that they had no quality control in place. It's a brilliant idea that would have been inevitably successful. But all that money is going to be its downfall.
- billfruit 7y ago
  They(Oyo) seem to an aiming it's focus for the convenience of booking/cancelling/payment s through their app, over everything else, and their app seems decent and focused to that end. That might appeal to many consumers especially in India, where the experience of booking a hotel stay in small and medium hotels is a terrible experience mostly, 8f you tried to do it your self, case in point the hotels in Pahargunj area in New Delhi.
technobrat 7y ago
Startups sacrificing profit on customer acquisition is understandable. But it is a huge red flag when they start losing both. https://oyo-ruined-my-anniversary.com/ https://oyo-ruined-my-anniversary.com/
thekhatribharat 7y ago
Oyo is en route to failure, and it will be another setback in India’s startup ecosystem after the Housing.com fiasco. The initial idea of guaranteeing basic amenities (clean bed/bath linen, WiFi, breakfast) through strict quality control and staff training was great, but they failed to deliver. Instead of improving and growing their first product, they launched new products and entered new geographies - most likely to inflate valuation. The founder itself has had a questionable behavior (ref: https://www.livemint.com/Companies/7CN7u5d4i3bfYgBAZLdLpM/Will-the-real-Ritesh-Agarwal-please-stand-up.html https://www.livemint.com/Companies/7CN7u5d4i3bfYgBAZLdLpM/Wi...)
purplex 7y ago
This went viral some times back in Indian social-media How Oyo completely ruined my first wedding anniversary: https://oyo-ruined-my-anniversary.com/ https://oyo-ruined-my-anniversary.com/
- Hitton 7y ago
  Although I'm sorry for your terrible experience with them, I'm also kinda glad, because your description was really entertaining (when you are not the one who has to live it).
deleted 7y ago
[deleted]
fareesh 7y ago
As a consumer, the OYO brand means nothing to me because anecdotally it's clear that they only claim to enforce standards but in reality it's an illusion. In the absence of that assurance, what am I getting from OYO? If I want a hotel room I will browse listings on the various aggregators that have them and go with the best find for my budget. Unlike Hyatt or Four Seasons or Taj, where you can treat the brand as an indicator of some standard, it doesn't exist in a meaningful way for OYO, even for a far lower standard. It's all over the place. If anything I'd be suspicious of OYO immediately. I'm unsure if my experience is the norm or the exception. If there's a huge segment of people who associate the OYO brand with trust, then their model would appear to be working quite well.
- achow 7y ago
  As an idea there is nothing wrong, infact it is brilliant! Not very unlike fast food franchise business, or Coca Cola bottling franchise - corporate puts in standards, best practices, supplies 'secret sauce' (some times literally), invests massively in branding and advertising which would be way out of thinking league of small time owners of the outlets. If this was done purely from problem solving perspective (and not as 'growth hack'), then it would have worked beautifully.
  - michaelt 7y ago
    I think fareesh's point is that the "put in standards" hasn't been sufficient for any investment in branding to be productive.
deleted 7y ago
[deleted]
wtmt 7y ago
Oyo is yet another company that shouldn't exist. In India, in an event at the beginning of this year (2019), it said it has a new initiative where it would share hotel guest information with the police and the government in real time. [1] [2] This kind of facilitation of mass surveillance while also enabling harassment is one of the most damaging ways to run a business and contribute negatively to a country. [1]: https://www.medianama.com/2019/01/223-oyo-real-time-data-sharing-system/ https://www.medianama.com/2019/01/223-oyo-real-time-data-sha... [2]: https://www.huffingtonpost.in/entry/why-oyo-sharing-check-in-details-with-the-govt-should-worry-you_in_5c3ee9d9e4b0922a21da1990 https://www.huffingtonpost.in/entry/why-oyo-sharing-check-in...
Travellersrest 7y ago
Quite interested in this subject. 1. Oyo are trying to scale incredibly quickly, always tough and in this investment climate, better get their forecasts correct and spend it quickly! 2. They are trying to scale globally, but adding software management of revenue and booking under their control is dangerous to owners especially if they have terms that include %'s take of increased revenue. This may mean booking at any price regardless in quiet periods and then there is a staff cost vs margin call. Quality will suffer. 4. The whole approach appears to be based on brand signage and not guest experience and is a budget business, so its a bottom feeding brand. 5. This budget position in Europe is often based on doing deals in older premises (quite few local to me). These are not modern eco-friendly, but high maintenance, unlike the new brands of accommodation which can also be budget and brilliant. In in all its seems that the approach may end up with a negative brand connotation as is developing on their Facebook reviews page and the knock on effect will ensure poor returns.A Softbank recurring nightmare.

123 points by nocoder 7y ago

Oyo ventured into Nepal quite recently. From my viewpoint I see rooms often can be charged by the hour on some of their signage, not just daily rates. That's the type of visitor they are looking to attract.

mav3rick 7y ago
What's wrong with that ?
- deleted 7y ago
  [deleted]
- ryanlol 7y ago
  Nothing, some prudes just don’t want to stay in hotels where other people have sex. Odds are that the hourly-rate rooms would be on a different floor than the daily-rate floors for logistical reasons, which makes it even harder for me to see any problem with this. There’s significant a cultural difference here too, in the areas where Oyo primarily operates young couples need these rooms just as much as prostitutes.
  - mav3rick 7y ago
    So true about the young couples bit. Look up "Stay Uncle".
    - puranjay 7y ago
      They were on sale at Flippa a while back: https://blog.flippa.com/flippa-seller-showcase-stay-uncle/ https://blog.flippa.com/flippa-seller-showcase-stay-uncle/
  - lotsofpulp 7y ago
    > Nothing, some prudes just don’t want to stay in hotels where other people have sex. What you write may be true for Asia, but if you’re from the US, it makes sense to be wary of hotels offering hourly prices since it attracts a clientele that reduces the quality of life at the hotel. It’s not about being a prude, it’s the fact that hotels frequented by pimps, hookers, and drug dealers offer a less desireable experience.
    - CaptainZapp 7y ago
      What you write may be true for Asia, but if you’re from the US, it makes sense to be wary of hotels offering hourly prices since it attracts a clientele that reduces the quality of life at the hotel. After having a neighbor who thought it's a good idea to turn her rented appartment into an illegal hotel I'd say exactly the same thing, regarding quality of life, about Airbnb.
    - ryanlol 7y ago
      We’re discussing a Nepalese hotel, not a US hotel.
- 9nGQluzmnq3M 7y ago
  Nothing, if you don't mind a constant stream of professionals turning tricks and their drunken clients marching through the corridors at all hours of the night.
dmix 7y ago
They were low end hotels before they bought them. Considering they own the whole property it’s not like this is a big deal like it would be for Airbnb (which is already used extensively for that).
- notahacker 7y ago
  It's a pretty big deal if the theoretical rationale for your brand's existence is to offer a chain of budget hotels suitable for lower middle classes travelling on business and with their families, especially if you're tending to charge quite a bit more than the bottom end of the local hotel market.
goatinaboat 7y ago
rooms often can be charged by the hour on some of their signage, not just daily rates I wish we had something like that in Wales. Sometimes after a day in the hills I’d like a hotel room for an hour just to have a shower and change into dry clothes before driving back down the A470. Fellow Welshmen may mock me now, I’ve grown soft from spending too much time in England.
- CaptainZapp 7y ago
  Check with local hotels. Hotels (alas mostly the business oriented ones) absolutely rent day rooms at reasonable prices if they have stock available. Just ask around.
- TwoHeadedBeast 7y ago
  I was driving from Berlin to Skopje once, and at one point really needed a rest, having not found a hotel in Austria. In Croatia, I did find a place that I could rent a room for 4 hours so I could have a shower and a nap before continuing my journey.
- rchaud 7y ago
  Would you be OK with this kind of flex arrangement if it meant that the hotel couldn't guarantee the state of the room or bathroom when you check in? Hotel management needs time to send cleaners to change the sheets and such after all. If booking is on an hour-by-hour basis like say a hotel meeting room, it isn't feasible to clean the place in between every booking.
  - goatinaboat 7y ago
    They could be in the process of cleaning even - I don’t need sheets on the bed or anything.

anon8123DF 7y ago

I was in Houston recently and was surprised to seen an Oyo-branded hotel, as I hadn't realized they'd expanded beyond being an aggregator. What do you know? 100% of Yelp reviews are 1-star: https://www.yelp.com/biz/oyo-hotel-houston-galleria-west-houston-3 https://www.yelp.com/biz/oyo-hotel-houston-galleria-west-hou... To be honest that actually makes them worse than WeWork at some level. WeWork may have an awful business model but at least its brand is (generally) known for consistent quality. [1] [1] https://twitter.com/jasonlk/status/1161659165619523584 https://twitter.com/jasonlk/status/1161659165619523584

puranjay 7y ago
The WeWork I work out of in Gurgaon, India, has the best coworking space I've ever used. They charge a big premium over other spaces but I'm happy to pay it. WeWork, I feel is a very viable business. Its obituaries are too premature. It doesn't warrant its $47B valuation, but it can easily displace Regus. Easily a $10B business, if not a $50B one. Which is incredible in itself
- irq11 7y ago
  Except that they’re losing a billion dollars a year at that level of quality. Cut the perks to make it a viable business, and you’ll probably end up with...Regus. Markets are pretty efficient that way.

Traster 7y ago

>SoftBank Group, directly and through its Vision Fund, is heavily invested in both. This is the worst case scenario. Every company that Softbank tries to unload becomes a liability because of the association. On the topic of the actual business, I think there's a really basic question people need to ask themselves when they look at these business models: In 10 years time does the industry you're in look different? Because that seems to be the fundamental problem here, Oyo's business model is basically that in 10 years time nothing about Hotels will have changed. Well what does that mean? It means we know how much the end company will be worth because it'll just be some multiple of a basket of other similar companies that exist today. So here's the question: Why are they claiming to be more valuable than InterContinental Hotels Group whilst having 1/75th of the revenue? Now onto the financial engineering - overvaluing your company, borrowing using shares as collateral and then investing that money back into the company. That is a feedback loop, if you can't pay back the loan the shares are worthless and so these loans are entirely unsecured. If that's happening at scale, that is exactly the sort of behaviour that will cause a bubble and it will burst. Someone really should do some proper reporting on that - find out how common it is and particularly if it extends outside of Softbank.

geodel 7y ago
Softbank also invested in Flipkart $2.5B which till date is huge loss making entity. But they dumped that crap on to Walmart and made a chunk of profit. Else it would be another dent on this poor vision fund.
- mathnmusic 7y ago
  Actually Walmart struck gold because along with Flipkart, they got PhonePe which is currently valued around 10B $: https://dailyfintech.com/2019/11/08/walmart-hits-gold-with-india-payments-as-phonepe-valued-at-10-billion/ https://dailyfintech.com/2019/11/08/walmart-hits-gold-with-i...
  - geodel 7y ago
    Ah, thanks for the link. I was totally unaware of this development.

deleted 7y ago

[deleted]

chewz 7y ago

[] https://scroll.in/article/940702/teenagers-electrocution-the-litany-of-complaints-against-oyo-rooms-just-got-a-lot-more-serious https://scroll.in/article/940702/teenagers-electrocution-the... [] https://economictimes.indiatimes.com/small-biz/startups/newsbuzz/from-oyo-to-uber-how-softbanks-100-billion-left-workers-in-a-hole/articleshow/72032747.cms https://economictimes.indiatimes.com/small-biz/startups/news...

9nGQluzmnq3M 7y ago

> For its core India business for the financial year 2018, Oyo reported revenues of just $61 million and a loss of $53 million. How on earth does this translate into a $10 billion valuation? For comparison, Hyatt's market cap is $7.9B, and they made $296M profit on $1,215M in revenue in Q3: https://s2.q4cdn.com/278413729/files/doc_financials/2019/q3/FINAL-Q3-2019-Earnings-Release.pdf https://s2.q4cdn.com/278413729/files/doc_financials/2019/q3/...

aptwebapps 7y ago
The valuation does not come from their operating numbers, core or otherwise. It comes from their last round of funding.
- 9nGQluzmnq3M 7y ago
  I'm aware of that, but the valuation implies that at least the investors think there's a plausible path for the business to be larger than Hyatt.
  - braythwayt 7y ago
    When the valuation is based on investment by investors already in the deal... It does not imply that they think there’s a plausible path for the business to be worth the money. As events have shown with WeWork, it implies that they are maintaining the façade for a little while longer while hoping o get to the point where they can unload the business onto the public markets. Asking SoftBank what they think their investments are worth is like asking me what I think my house is worth. You Have to go by what arms-length investors are willing to pay. I really think we need a new rule where nobody quotes a valuation if the last round involved existing investors and/or founders pumping up the valuation with additional investment.
puranjay 7y ago
Hyatt should just call itself a tech company and increase its valuation 10x

oefrha 7y ago

Franchising, and buying up small hotels to form a hotel chain are both very old business models. So it seems to me that neither their original (basically franchising) nor current business model is innovative. What exactly does Oyo bring to the table? Seems even worse than WeWork.

lotsofpulp 7y ago
The valuable part of the franchising business model is ensuring a consistent experience for the buyer. That would involve spending money to hire a considerable workforce to continuously visit and evaluate every hotel. That would involve spending money and make it clear that the marginal costs of franchising hotels is not zero, and so it’s not worth the crazy multiples of revenue valuations that software companies are. All of these companies are an exercise in figuring out how to create plausible deniability to justify investing in it so that it can be dumped onto a greater fool.

anuraj 7y ago

OYO in India stand for poor quality. Neither do they have lasting assets other than contracts with Franchisees. Not a model built to last.

runn1ng 7y ago
In Vietnam, they vary in quality so much as to make the brand meaningless. There are good ones and terrible ones. The business model doesn’t seem to make sense to me either.

fastball 7y ago

https://www.profgalloway.com/unicorn-feces https://www.profgalloway.com/unicorn-feces

bengale 7y ago

I made the mistake of booking one of these OYO rooms in London recently. Seriously shocking they'd even try to claim it as a hotel, dingy bedsit maybe a better description. Would never book with them again.

leoedin 7y ago

Oyo are aggressively expanding. When I was in Nepal earlier this year they had OYO branded hotels everywhere. Since then they seem to have started taking over the super-budget hotels in London. I assume it's mostly the same hotels, but they've been paid to slap an OYO sign on the front. It's hard to see what actual additional value they bring though. They're not really a stamp of quality, and they're not generally opening new hotels, just rebranding existing ones. Booking websites are hardly a new thing - booking.com and hotels.com are pretty entrenched, and have the advantage that they index every hotel not just ones which agreed to put up the OYO sign. Maybe OYO will take a cut of the booking.com market (which from what I've heard is incredibly profitable), but by building an OYO brand with a reputation for budget low quality, they're moving in the wrong direction to do that.

coredog64 7y ago
Hotel chains have to share revenue with OTAs like booking.com. OTAs typically have agreements that they get the lowest public rates. Therefore, if you’re a hotel with enough online presence to drive demand, you can keep more of the money by having customers book direct via a loyalty program. One way to do that is a broad network that allows customers to always book directly with you.
puranjay 7y ago
The problem with Oyo, and its virtually most people who've used it (me included) will concur, is that the Oyo brand itself is tainted. Experiences are extremely inconsistent and the quality is all over the place. Hotels keep withdrawing from the Oyo platform because of non-payment of dues. Oyo's customer service is shoddy. This business should have been built slowly and carefully. But Softbank's billions meant that they expanded so fast and so soon that they had no quality control in place. It's a brilliant idea that would have been inevitably successful. But all that money is going to be its downfall.
billfruit 7y ago
They(Oyo) seem to an aiming it's focus for the convenience of booking/cancelling/payment s through their app, over everything else, and their app seems decent and focused to that end. That might appeal to many consumers especially in India, where the experience of booking a hotel stay in small and medium hotels is a terrible experience mostly, 8f you tried to do it your self, case in point the hotels in Pahargunj area in New Delhi.

technobrat 7y ago

Startups sacrificing profit on customer acquisition is understandable. But it is a huge red flag when they start losing both. https://oyo-ruined-my-anniversary.com/ https://oyo-ruined-my-anniversary.com/

thekhatribharat 7y ago

Oyo is en route to failure, and it will be another setback in India’s startup ecosystem after the Housing.com fiasco. The initial idea of guaranteeing basic amenities (clean bed/bath linen, WiFi, breakfast) through strict quality control and staff training was great, but they failed to deliver. Instead of improving and growing their first product, they launched new products and entered new geographies - most likely to inflate valuation. The founder itself has had a questionable behavior (ref: https://www.livemint.com/Companies/7CN7u5d4i3bfYgBAZLdLpM/Will-the-real-Ritesh-Agarwal-please-stand-up.html https://www.livemint.com/Companies/7CN7u5d4i3bfYgBAZLdLpM/Wi...)

purplex 7y ago

This went viral some times back in Indian social-media How Oyo completely ruined my first wedding anniversary: https://oyo-ruined-my-anniversary.com/ https://oyo-ruined-my-anniversary.com/

Hitton 7y ago
Although I'm sorry for your terrible experience with them, I'm also kinda glad, because your description was really entertaining (when you are not the one who has to live it).

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fareesh 7y ago

As a consumer, the OYO brand means nothing to me because anecdotally it's clear that they only claim to enforce standards but in reality it's an illusion. In the absence of that assurance, what am I getting from OYO? If I want a hotel room I will browse listings on the various aggregators that have them and go with the best find for my budget. Unlike Hyatt or Four Seasons or Taj, where you can treat the brand as an indicator of some standard, it doesn't exist in a meaningful way for OYO, even for a far lower standard. It's all over the place. If anything I'd be suspicious of OYO immediately. I'm unsure if my experience is the norm or the exception. If there's a huge segment of people who associate the OYO brand with trust, then their model would appear to be working quite well.

achow 7y ago
As an idea there is nothing wrong, infact it is brilliant! Not very unlike fast food franchise business, or Coca Cola bottling franchise - corporate puts in standards, best practices, supplies 'secret sauce' (some times literally), invests massively in branding and advertising which would be way out of thinking league of small time owners of the outlets. If this was done purely from problem solving perspective (and not as 'growth hack'), then it would have worked beautifully.
- michaelt 7y ago
  I think fareesh's point is that the "put in standards" hasn't been sufficient for any investment in branding to be productive.

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wtmt 7y ago

Oyo is yet another company that shouldn't exist. In India, in an event at the beginning of this year (2019), it said it has a new initiative where it would share hotel guest information with the police and the government in real time. [1] [2] This kind of facilitation of mass surveillance while also enabling harassment is one of the most damaging ways to run a business and contribute negatively to a country. [1]: https://www.medianama.com/2019/01/223-oyo-real-time-data-sharing-system/ https://www.medianama.com/2019/01/223-oyo-real-time-data-sha... [2]: https://www.huffingtonpost.in/entry/why-oyo-sharing-check-in-details-with-the-govt-should-worry-you_in_5c3ee9d9e4b0922a21da1990 https://www.huffingtonpost.in/entry/why-oyo-sharing-check-in...

Travellersrest 7y ago

Quite interested in this subject. 1. Oyo are trying to scale incredibly quickly, always tough and in this investment climate, better get their forecasts correct and spend it quickly! 2. They are trying to scale globally, but adding software management of revenue and booking under their control is dangerous to owners especially if they have terms that include %'s take of increased revenue. This may mean booking at any price regardless in quiet periods and then there is a staff cost vs margin call. Quality will suffer. 4. The whole approach appears to be based on brand signage and not guest experience and is a budget business, so its a bottom feeding brand. 5. This budget position in Europe is often based on doing deals in older premises (quite few local to me). These are not modern eco-friendly, but high maintenance, unlike the new brands of accommodation which can also be budget and brilliant. In in all its seems that the approach may end up with a negative brand connotation as is developing on their Facebook reviews page and the knock on effect will ensure poor returns.A Softbank recurring nightmare.