Launch Date - 21st May 2013
Founder - Ritesh Agarwal
Tagline - ‘Home away from Home’
Company Valuation - $5.7 Billion
Key Investors - Softbank Group, Greenoaks Capital, Sequoia Capital, and Lightspeed India
Funding Received - $1.7 Billion
Total Employees - 10,001 + Employees
The story of this amazing venture began in the year 2011 when it was launched as ‘Oravel’ by its 21-year old founder, Mr. Ritesh Agarwal. All he did was to exploit a space at a time when no one believed it to be workable. The very idea behind Oyo was to own a large fleet of hotel chains without actually investing in the same. Oyo Rooms is modeled after Airbnb, but the courage to start such a venture in a country like India posed the main challenge for its founder.
A college dropout, a Thiel Fellowship program scholar, and a person with a keen interest in software, Mr. Ritesh Agarwal is the man responsible for changing the dynamics of the hospitality sector. In the year 2011, marked by the downgrade of the hotel chains, he observed one problem that faced all of them – Cleanliness. There was adequate demand generated on account of business travel, tourism, and other factors, however, the one thing affecting business was the lack of quality in the sector. About 90% of the Hotel Chains were less than 100 room counters and therefore, faced the problem of management. They were incurring huge losses and could not bear the operational costs to improve their conditions. This was a major catch as Mr. Ritesh, after carefully analyzing the situation of the sector, by personally staying in these hotels for a quarter or so, took the decision to launch Oyo.
Oyo is a one-stop solution where people could easily find clean, cheap, and affordable rooms at the best offers available. It quickly turned out to be the best place to visit for un-married couples since they could get good rooms with just a local id proof. Slowly and steadily, as people started to gain confidence in the quality assured by the company, its dominance sky-rocketed and it stands today as the biggest company in the hospitality sector. The company that started with just 1 hotel in 2013, is now the world’s third-largest hotel chain with a capacity of 23,000 hotels across 800 different cities. Some of its major international markets include China, U.K, and the United States.
However, the biggest challenge that faces Oyo is the operational expenses it has to bear on account of paying fixed charges to the hotels it acquires and the lack of demand in off-seasons. It has numerous allegations against it and faces stiff legal problems which hamper its progress and makes it less popular in backward regions. However, the company keeps on expanding despite its increasing losses, all on account of the scope of the industry it is present in.
Key Takeaways –
1. Standardised Services –
The company has gained recognition on account of its services that invoke a sense of quality among the consumers by providing cheap and affordable hotels with the best service possible.
2. Skilled Team of Employees –
As mentioned by its founder, the success of Oyo is credible to a brilliant set of people who gave their 100% to make Oyo what it is today.
3. Profits aren’t Everything –
In spite of incurring huge losses, Oyo Rooms continue to expand in different parts of the world on account of the scope of the industry and the target they aim to cover.
Wrapping it Up-
Oyo rooms is one of the start-ups that has revolutionized the way of doing business. With a CEO who began so early in life, it has numerous opportunities in its hand so as to change the Hospitality sector and give it a new definition.
It already stands as one of the leading hotel chains in the world, and with the speed, it is currently expanding with, it certainly will have a huge stand in the corporate world.
