OYO turns to new tech playbook for global markets
The firm also launched its chat service Oyo Yo! to help customers and property owners address grievances
Bengaluru: Hospitality unicorn OYO Homes and Hotels Ltd, in a bid to keep costs in check and improve profitability, has turned to various technology offerings across markets to bring in efficiencies.
The company, which had to halt its hyper growth strategy and restructure operations last year, is also using its tech stack to improve customer and hotel partner services.
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OYO launched OYO Secure, its internal wallet-like service that allows property owners to upload a certain amount against which reconciliations of commissions and payments take place, on a daily basis. Disputes can also be raised against these transactions on a single platform in a streamlined manner.
The firm also launched its chat service OYO Yo!, that was piloted earlier as OYO Assist, to help customers and property owners address grievances. OYO said 85% of all queries are now being routed through the chat service.
OYO also plans to take its products and renewed technology playbook to all its international geographies as it looks to curtail costs and bring down owner complaints.
“Covid in some way was also an example of how crisis brings clarity. We realised that OYO could use data science and technology to constantly give partners more visibility to how they can make changes in their decision making and get improved revenues," OYO founder and CEO Ritesh Agarwal said.
“The view is to use this same technology platform to serve customers and partners, especially for OYO International as we do in our core markets. Any expansion in international markets for OYO will be now technology-led," Agarwal added.
In the past, OYO has also been accused by property owners globally of stifling commissions as it relies on its own algorithms to determine pricing of properties. To give better control to property owners, OYO has allowed them to now change the price range by 10% on its revenue management platform. It also launched OYO Discover during the pandemic to allow property owners to provide unused inventory to OYO’s first-time customers at a flat offer price of ₹499, to get demand back.
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Newer products like OYO Discover are present in OYO’s core India and South-east Asia (INSEA) markets, besides Saudi Arabia and UK, as it looks to scale them to all geographies. It has already scaled OYO Yo! to 12 international markets.
OYO said bringing in technology in processes has also led the company to turn profitable at an EBIDTA level in its core market India.
“Between last April and June, during lockdown, we took every process in the company and tried to improve it through deployment of technology and products in India. Post July, our focus has been to tightly control costs" said Rohit Kapoor, CEO of OYO INSEA.
The pandemic also forced OYO to pull the plug on expansion in Latin America, witnessing its biggest investor Softbank, exiting the joint venture. It has downsized and moved to a digital service model there, curtailing costs of sales reps and manual operations.
“OYO is trying to reposition itself from a pure play hotel company to a leisure and technology-driven firm. It is also trying to align its operational metrics to that of a tech firm. OYO aspires to do an IPO in 2022 and in the next year, it is looking at building those tech capabilities and tweaking its strategy," said a person who was aware of the company plans and didn't wish to be named.
OYO’s focus on rapid growth between 2017 and 2019, has done it more harm than good, as owner complaints took centre stage, and net losses soared to $335 million in 2018-19 compared to $50.5 million in the preceding year. The company hasn’t released its 2019-2020 financials yet.
“OYO seems to be playing a defence versus offense strategy earlier, as it parks its ambition to become the world’s biggest hotelier. Hyper growth and covid did throw the company off balance, and improving cost structures looks like a sensible way to its revival," said an analyst, who didn’t want to be named.
Madhurima Nandy contributed to the story.
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