OYO Business Model Analysis | How It Earns Money?

 

Ritesh Agrawal founded OYO Rooms (On Your Own) in 2013 and is today one of the largest hotel chains in the world. One of the main reasons for success is its business models, which have made this company different from its competitors and from India's biggest hotel company. The Company uses the aggregator business model like that of Uber and OLA. OYO Rooms is a hotel aggregator because it uses the aggregator business model. Do we know what the aggregator business model means, and how does it work? The Aggregator business model is a networked business model in which companies collect information about a particular industry that is disorganized and populated, partner with them, and sell their services under their own brand.

OYO uses the aggregator business model to run its business. Ritesh Agrawal in his young age wanted to be an entrepreneur and liked to travel to different places. One of the main problems he frequently encountered when traveling was the quality of hotel services. Various hotel chains have acquired hotels with more than 100 rooms. 

About 90% of the small unorganized households functioned freely in the country. Ritesh noted that a huge area of ​​business opportunities was available. So he decides to open OYO rooms and organize small inns with one brand. OYO acquired its first hotel in Delhi in 2013 and has not regretted OYO since that day. The Firms business model focuses on building partnerships with hotels, applying uniform standards and developing a user-friendly environment in their hotels. At first, OYO organized itself to collaborate with hotels, rent rooms and sell them under its own brand.

OYO has become popular thanks to the service offered by the company. People can get standard service at affordable rates at OYO hotels. How is OYO's business model different from other hotel aggregators? Although OYO is a hotel aggregator, its business model is different from that of other hotel aggregators like Airbnb. The Company is committed to standardizing the quality and services offered in the hotel. OYO regularly trains staff and focuses on retaining employees in the organization. Unlike other hotel aggregators, the customer can complain about OYO hotel services. 

If the company finds out that the hotel is not providing the company's standard service, it removes the hotel from its app. OYO's Current Business Model The process remains the same, but the business model has changed from aggregator to franchise. Unlike in previous days, OYO rooms no longer rent hotel rooms. Instead, OYO asks hotel partners to work with them as a franchise. OYO rooms have good brand value and enjoy a 100% increase in revenue from their partner hotels. Now, OYO Rooms is the largest network of branded hotels, currently operating 12,000 hotels in 337 cities in India, Malaysia, United Arab Emirates, Nepal, China and Indonesia. 

Is the economic model of its company rooms sustainable? The economic model of the OYO chamber is very profitable and sustainable. The reasons behind OYO's sustainable business model are as follows: Standard service quality Affordable price Good feedback system Regular employee training 4 strategies that have made OYO a successful company All other hotel chains combined in total does not represent half of the number of hotel rooms in OYO India.

After only 5 years of creation, the OYO hotel chain has spread to more than 330 cities around the world. OYO did not succeed overnight, he had to work hard to reach the position he now occupies. Here are the 4 strategies that made OYO successful: Assets Light Strategy One of the main strategies implemented by OYO is the asset light strategy. Start up because the business has less capital than the value of its operation. The small hotels which accounted for almost 90% were empty and no one was paying attention. 

Ritesh Agrawal partnered with these small hotels instead of building them himself, which saved him a huge amount of money. The asset light strategy helped OYO to turn a profit and grow its business in no time. He is fully responsible for the customer experience, takes the end of the end of the responsibility of the customer's experience on himself.

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