Founded in 2011, not only has OYO become India’s largest hospitality company, it is now growing at a breathtaking pace in China, with more than 180,000 rooms under its badge less than a year after its launch. Founder & Group CEO Ritesh Agarwal speaks to Jonathan Ananda on what makes it tick. Excerpts:
Why has OYO begun to expand beyond India?
It has to make sense for us from an occupancy point. With time, we have created strong competencies in renovation, asset management, revenue management, and skilling. We make sure that any activity we do revolves around these competencies. Moreover, we expand to other markets only when a product is mature in our home market. The first thing is to create competencies and then scale in a product in the home market.
What opportunities and challenges do you face abroad?
There are always challenges while working in an overseas market. However, we have been lucky to have strong teams…
For an Asian-built hotel chain like ours, we have identified an opportunity to become the world’s largest chain in the future. We will work towards providing an affordable and trusted stay option for both Indian and international tourists and our rapid expansion overseas suggests that we are on the right track.
How do you plan to take on more established rivals?
One thing we follow across all our markets is more emphasis on acquiring new customers and retaining existing ones. However, we always adopt an independent approach designed as per the country’s requirements... Moreover, we differentiate from competitors by taking end to end ownership of customer experience — from booking to checking out.
For an Indian brand, what is the most vital factor to keep in mind while going global?
The most essential aspect while trying to make it big overseas is to understand the market and innovate accordingly. It isn’t necessary that a business model which has worked wonders in the domestic market will flourish internationally.
It is necessary to adapt... making it crucial to have a proper knowledge of the industry. We have also made our share of mistakes, but what is important is to take these as learnings and take a localised approach to build your business from scratch.
Are there any unique advantages/disadvantages that come with an Indian brand?
... when we forayed into China, we saw that the market offered tremendous opportunity both in terms of the market size and travellers. The country’s tourism industry was on the cusp of booming and enjoyed a steady influx of tourists. We identified that its hospitality landscape was as fragmented as India’s. Our expertise in managing a chain of hotels backed by technological innovations and a unique ‘localised’ business model, made it possible to offer high-quality standardised experiences at unmatchable scale.
Is OYO planning to expand to more new markets?
We plan to expand... focusing on markets in Southeast Asia, the Middle East, and beyond.