IT PROJECT

OYO ROOMS

Submitted by :-

Stuti Aggarwal G-65

Mahek Bisht G-19
Neha Pushpam G-33
Naila Raza G-67
Heemanshu Mahajan G-09
 EXECUTIVE SUMMARY

OYO rooms are turning into indias largest chain of hotels . No doubt , Ritesh Aggarwal 21 year
old the founder and CEO of the company has put all his efforts to make it the best . His first start
- up was started in 2012 as Oravel stays pvt ltd and later was renamed as OYO rooms
(Headquarters in gurugram ,harayana ). It was started with 1 city and 1 hotel in gurugram The
rooms are available for Rs 999 to Rs 400 It is operating in 200 Indian cities and Malaysia .
There vision is to change the way people stay away from home.

It owes as well as accumulate standardized rooms which include AC rooms free wifi ,
television, complementary breakfast , beverages and many more facilities at reasonable price .
You can also book the room online by downloading a mobile app ( which can book a room in
less than 10 sec ) or it can also be done by calling or visiting the website . The company is
expanding at a great speed and is focusing on creating great hospitality . They got funding from
Softbank group , greenoaks capital , sequoia capital and lightspeed india . They have recently
signed an agreement with Travelport and the finanacial detail is not being shared by the
company In order to grow and expand more they are focusing on digital marketing so that they
attract and acquire more customers .

They have tied up with PayPal as this can help them for booking in Malaysia They have also
decided to triple their inventory by December and currently they have 5855 partner hotels in 170
cities with total room capacity of 68300 .

They have also introduced OYO BAZAR where u can purchase your day to day essentials . This
shows that OYO rooms are growing tremendously and are becoming a threat to other companies.
 ABOUT THE INDUSTRY

India is a large market for travel and tourism. It offers a diverse portfolio of niche tourism
products - cruises, adventure, medical, wellness, sports, MICE, eco-tourism, film, rural and
religious tourism. India has been recognized as a destination for spiritual tourism for domestic
and international tourists.

Total contribution by travel and tourism sector to Indias GDP is expected to increase from US$
136.3 billion in 2015 to US$ 275.2 billion in 2025. Travel and tourism is the third largest foreign
exchange earner for India. In 2014, the country managed foreign exchange earnings of USD 19.7
billion from tourism.

The launch of several branding and marketing initiatives by the Government of India such as
Incredible India! and Athiti Devo Bhava have provided a focused impetus to growth. The
Indian government has also released a fresh category of visa - the medical visa or M visa, to
encourage medical tourism in the country. India is expected to receive nearly half a million
medical tourists by 2017, implying an annual growth of 30 per cent. In November 2014,
Government of India launched Tourist Visa on Arrival (TVoA) which is enabled by Electronic
Travel Authorization (ETA), known as the eTourist Visa scheme for 43 countries. The facility is
likely to enable 7.5 percent growth in the tourism sector in 2015.

The Government has also been making serious efforts to boost investments in tourism sector. In
the hotel and tourism sector, 100 per cent FDI is allowed through the automatic route. A five-
year tax holiday has been offered for 2, 3 and 4 star category hotels located around UNESCO
World Heritage sites (except Delhi and Mumbai). The investment in tourism sector is expected to
be US$ 12.4 billion in the 12th Five Year Plan; of these, private investments are likely to total
US$ 9.2 billion.
 BUSINESS MODEL OF OYO ROOMS

OYOwhich is in current times known to be an online hotel market place is kind of an

aggregator business model which is just turning into the largest chain of hotels in India. The
Business model of OYO adopts the hotels, gets them in fold and then makes them follow the
certain standards like its services, prices, services, security, other features and etc. and it sells the
hotel rooms under its own brand name according to its own pricing. Hotels generally provide
what they want to provide , that is, their services but OYO markets it for them. They in return
charge a rate and ask for the quality in the hotels which they desire to deliver them under their
own name.

OYO rooms operate differently from the other travels agents online as they focus on partnering
with other brands. They also partner with zero, 2 star hotels and even guest houses, modify and
standardize them and hence bring them customers through their websites and apps. They work on
a minimum deal with the partners because of which they are able to get discounted schemes and
other promotional deals on the rates of the room which are actually directly provided by the
hotels to the guests. Hence the way in which they operate makes them productive for the guests.

At present the company is aiming towards funding its technology and focusing on the expand
and invest mode and they are also hiring and adopting the other market development activities.
This is going to be a total disaster for the other traditional hospitality industries.

The transaction and market coverage of OYO has led swift increase as they have been listed
with other traditional travel aggregators. They also started the their app booking facility in
September and hence now it aims to expand faster beyond the current number of rooms that they
are running. The segment of hospitality targets the budget tourists and the other business
travelers which is in its favor as the revenues can get realized.

OYO invests in quality improvement and marketing of the hotels rather than owning any of the
properties under its name. This plays as an opportunity for the OYO as well as the hotels who
just do not have the knowledge and budget for a smart marketing. OYO will have to bring in
more strict offline quality tools as they have to start making money by increasing its scale and
size as they are supposed to manage their customers onboard and also keep their brand on going
progress.

It might be easy for people to say that it is not a bid deal but it is not easy in a country like India
where standards are not followed by the B and C class hotels and also where certain
professionals are not entirely trained and do not have the knowledge for the hospitality space and
where it is not easy at all to just earn money to improve your hotel in total. OYO as of now has
almost created a compelling and understanding proposition for their partner hotels. OYO will
hence have to keep on doing and introducing interesting things to stay ahead in the race in order
to keep on surviving in the market.

CHALLENGES FACED BY OYO ROOMS

Oyo rooms were too successful and lured many customers, but these startups are gradually losing
their grip on their business in the country due to their glitches. The three core promises OYO
upholds are Availability, Predictability and Affordability and two of them werent being upheld.
So in order to standardize the process, the team went back to the drawing board. The past few
months have been rickety for OYO. There have been negative reviews on room standards, wi-fi
connectivity, quality of service and also about the bookings. The tipping point was a facebook
rant by Manoj Thelakkat, which went viral on social media. We need to wait and watch to see
whether these issues will be resolved to attract further business and support form hoteliers or not.
 COMPETITORS OF OYO ROOM

The competitors of OYO rooms include :

Treebo:
Treebo hotels, a technology-enabled budget hotel chain, has raised Rs 112 crore in a new funding
round led by Bertelsmann India investments with participation of existing investors, Saif
Partners and matrix Partners India. Treebo , which competes with budget hotel room aggregator
OYO rooms, backed by Softbank corp and sequoia capital, will use the capital to quadruple its
network to 12,000 rooms across 450 properties in the next 12 months.

Wudstay:

Wudstay Travels Pvt. Ltd which started off as oyo rooms rival in the budget hotel aggregation
space- has been quietly carving its own niche in the pg segment. It is still betting big on the $30
million budget hotel accommodation market. Currently the company which works on a revenue
sharing model retaining 20-40 percent of the revenue generated in this space- has over 500 hotels
and guest houses across 45 cities in India. In Jan 2016, it claims to have served 58,000 room
nights. By 2016 end, wudstay aims to expand to 20 more cities and have around 1,000 hotel
properties in its network.

Zip rooms:

Zip room was conceptualized a few years ago and they are already present in 11 cities and aim to
tie up with 300 to 400 hotels in the next 12 months. Zip rooms has already looked at 25,000
hotels to check potential partners, and claims that there are 11 lakh hotel like properties in India
that can be looked at in the budget hotel segment.

Stayzilla:

Stayzilla run by Chennai based Inasra technologies, expects Rs 1,000 crore in revenue by march
2016.The company CEO expects 60 percent of the overall gross sales will come from
dormitories, hostels, guest houses, villas and homestays. On the stayzilla platform, there are over
26,000 properties from 4,000 towns. Stayzilla expects to cover 8,000 towns with over 35,000
alternate stays by March
 STRENGTH Weakness

Budget hotel Premium

Constant pricing
innovation Restricted to
Affordable only budget
Strategic location hotels
Excellent use of Fast
advertising for expansion
high brand recall leading to
Understanding compromise
customers on quality
different needs
Opportunity Threats

Luxury market to Competitors

expand in India like Zo Rooms
Increase in and Stayzilla
tourists Fewer repeat
Use of social customers
media to enhance More
consumer advanced
experience technology
The number of are required
budget travellers
in India is on rise