The problem in finding accommodation as a traveller in India is simple – the lack of predictability. Although many choices are available, there are often reports of standalone hotels providing substandard hospitality services when guests arrive at their doorstep. Think dilapidated buildings, leaking taps and shower heads, malfunctioning air conditioning, unavailability of card payment methods – the list goes on.

Founder Ritesh Agarwal hence envisions OYO as a solution to this issue. OYO hotels provide a timely and quality stay with services such as free Wi-Fi and breakfast, a flat-screen TV, branded toiletries and a fully functional restroom with the assurance of consistency and standardization. The price of OYO’s rooms remain affordable to the budget traveller – a night’s stay can range from US$16 to $25.

OYO intends to tackle the problem of undependable accommodation in India by providing a standardization of services while building a relationship of trust with travellers.

oyo rooms startup hospitality india

OYO intends to tackle the problem of undependable accommodation in India by providing a standardization of services while building a relationship of trust with travellers

Moreover, OYO capitalizes strongly on data management and facilitation in order to further enhance its accommodation services. Based in Gurgaon, New Delhi, the booking of OYO rooms – including check-ins, check-outs – are all done through a tablet application. Areas with high levels of demand for accommodation are highlighted and prices of the rooms are set through algorithms and computer programs.

Backed by Sequoia Capital, Greenoaks Capital, Lightspeed India and Softbank, OYO is experiencing high levels of growth and intends to expand its coverage to 500,000 rooms in upcoming 2 to 3 years. We managed to talk to OYO Chief Operating Officer Abhinav Sinha to discuss more on the hospitality start-up’s plans as well as outlook on the future of the industry within India and the Southeast Asian region.

Q: What is the long-term vision of OYO?

OYO has pioneered a business model that’s unique to the core. By standardizing the in-room experience of travellers, OYO has instilled predictability in the highly-fragmented hospitality sector of India. With strong emphasis on in-house technology and well-defined processes, OYO has succeeded in delivering predictable, affordable and available budget-room accommodation to millions of travellers.

A booking with OYO comes with the promise of air-conditioned room, flat screen television, free Wi-Fi, complimentary breakfast and 24×7 customer care. Customers can book a room using the OYO app in mere 5 seconds with three taps on their mobile screen. The same app then be used for ordering tea or coffee at the hotel, looking for a nearby restaurant and booking a cab. The idea here is to add value to the experience of customers by providing them a unified platform for all their accommodation-related needs.

Currently, our network is spread across 200 Indian cities with 70,000 rooms in 7,000 hotels but there is still a lot of ground to cover. HVS estimates that 1.8 million Indian rooms are in “unbranded” hotels, compared with 112,000 in “branded” ones.  Online penetration in this sector is around 2% and with technology as the enabler, we want to utilize this opportunity to the fullest. We recently launched our operations in Malaysia with a vision to become the most preferred and trusted hotel brand in the world.

Q: OYO has reinvented the rules of hospitality in Asia. It has standardized hotels for a better customer experience. But don’t you think that customers will soon look for more personalized and social experiences as there is a trend for that (for example, Airbnb, hostels…)?

In a fragmented market like India, the problem was not discoverability of hotels but the lack of a quality stay-experience. There were no set standards of service and customers were under-confident while booking a budget accommodation. The standardized, predictable model of OYO therefore, emerged as a solution to cater to this specific need.

In a span of nearly two years, OYO has grown exponentially and has come to symbolize value-based offering by taking care of basic expectations of travellers. While personalized experiences add authentic and local flavours to the stay experience of niche leisure travellers, family travellers and business travellers have certain specific expectations that we successfully fulfill. This has contributed to our faster adoption in the market compared to older, well-established players in online travel.

Q: How do you see the future of hospitality in Asia? How is it different from hospitality in other parts of the world?

Asia is on the cusp of increased internet penetration and smartphone adaptation. Even with its fragmented and under-serviced hotel supply, the destination is famous among travelers and enjoys huge footfall. Also, traveling in and around Asia is not very heavy on the pocket. From backpackers to nature-lovers, Asia fits the bill for everyone. We started our international expansion with Malaysia as it’s an attractive market with sizeable internet and mobile presence, which complements our approach. The market holds huge potential.

Q: Will there still be a room for hotel chains such as Taj Hotels or Accorhotels?

Of course! Hotels like Taj & Accor cater to the niche luxury travelers and their existence adds more value to the ecosystem. Other players in the industry surely expand the spectrum of choices available to the customers and enable them to select as per their needs & requirements.

Every player in the market is contributing to the ecosystem in their own way, thereby creating more choice and diversity of options.

EDIT : Article has been edited on 16 January for accuracy of data. Additionally, OYO Rooms has been rebranded as OYO, effective January 2017.