OYO, one of India’s largest branded network of hotels has announced that it hit unit profitability at an aggregate level across its presence in 170 cities of India. OYO had operating profits until June 2015, following which it went into aggressive expansion mode to gain market leadership. Since February 2016, the company has regained profitability at a network-level.
Speaking on this development, Ritesh Agarwal, Founder and CEO, OYO said, “OYO’s strong performance is the result of our sharp focus on the quality of guest experience. We have utilised our technology, data science capabilities and the benefits of scale to achieve high number of repeat guests and growth in OYO’s brand recognition. This is a clear manifestation of the rigor, passion and disruptive thinking we bring to this space. We have always maintained that success in the domestic hotels space will not be driven by size or discounting- the market will reward businesses that are customer-first, agile and built with a differentiating factor.”
Ritesh added, “Our team delivered 15x YoY growth with 2.3 mn booked room-night transactions in Q1 Jan-Mar 2016 while our GMV continues to grow aggressively every month. 95 per cent of our traffic comes from our own sales channels such as app, web and call-centre. The cities driving profitability for us are those that have matured over the last year which include Gurgaon, Delhi, Hyderabad, and Kolkata. We plan to grow deeper in all key business and leisure cities and triple our inventory by December 2016.”
Ritesh further elaborated, “Profitability has come from innovating revenue-sharing models, a deep understanding of our markets and enabling new demand growth channels. These coupled with a strong data science driven approach help us dynamically control occupancy and room pricing. Far from being a hindrance, our large network and scale allow us to adopt a pricing portfolio approach and provide a wide inventory-choice for the guest. Our real-time demand prediction engine smartly balances revenue management versus an all-out discounting approach. This makes us the majority source of demand for our hotel partners and enables relationships that secure a superior experience for OYO’s guests.”
