OYO, we all know this name when planning for a vacation or a business
trip comes to our mind. But some of you must not be knowing the story behind
the voyage of OYO Rooms, India’s largest and smartest hospitality company.
The company was founded by Ritesh Agarwal in the year 2011 with
the name Oravel Stays. It was made to do the listing and booking of short stay
budget accommodations and was built on the lines of US-based service AirBnB – an on-demand
vacation rental app.
The company’s turning point came when it received an amount of
$100,000 from Thiel Fellowship in 2012. Just after a year, Oravel stays pivoted
into OYO Rooms and was launched in Gurgaon which is now a marketplace of
budgeted hotels with standardized experience.
You must be still curious about its business model, its major
milestones, its working style, and revenue generating process. Well, let’s dive
further into detail. In the end, we would like to share some key takeaways for
your business as well, so Stay Frosty!
OYO Stats and Facts: Funding and Major
Date: 21st May, 2013
Name- Oravel Stays Private Limited
CEO: Aditya Ghosh
Received: $1.7 Billion (latest funding raised on April 1st,2019)
Valuation: $5.7 Billion
Gurgaon, Haryana – India
Employees: 10,001 + Employees
Served: Asia & Europe
Served: 10 Countries (India, China, Malaysia, Nepal, the United Kingdom, the United
Arab Emirates, Saudi Arabia, the Philippines, Indonesia and Japan)
Served: More than 500 cities in India and operates more than 4, 50000 rooms
globally as of January 2019.
How OYO Works?
OYO Rooms is an app for searching and booking accommodations. Using the app, users can book the hotels ahead of the time in any of the 128 cities across India. Because of offering impeccable services to the visitors in the city, an OYO room is recognized as one of the best mobility software solutions. If you are having this sort of extraordinary business idea for a hospitality management application, you must see how this excellent solution works and brings money to the table.
is the working of OYO Rooms app in eight simple steps:
After doing quick
signup in OYO mobile app, users can book accommodation in just three simple
steps. Just select the location, the number of guests likely to stay, budget, the
number of rooms required and you are all set to enjoy.
The app will then list all the hotels of the desired location under the customer’s budget. Users
can use the filters of cost & desired utilities
The payment for
the room is done after booking.
trips or special events, OYO also provides options for OYO townhouses, OYO
Homes, Silverkeys, OYO Palette, and OYO Living, Studio Stays.
OYO mobile app has a dynamic home screen which not just shows the list of hotels but also the
options of nearby restaurants and adventure spots, even the option to book for
it while booking your OYO room.
listed under OYO offer free cancellation as well under some specific
OYO Wizard which
is a subscription model is also available which offers exclusive discounts,
deals & cashbook offers.
After the stay,
the users can provide ratings and reviews within the app.
Makes Money – Revenue Generation Model
like the world’s best taxi-hailing
app Uber owns no taxi – Oyo rooms have no rooms of its own. This implies
that it doesn’t claim any of the lodgings that users book through its app. It
is basically an interface for users to look for and book hotels which are a
part of its Network.
by Ritesh Agarwal, Oyo began its voyage with only one network property in 2013
and now claims to have a presence in more than 230 urban communities across
India. Recently, it has tapped in the International Markets as well.
app evolved its business model from aggregator to franchise and has got amazing
traction after that. They keep on holding no stock of their own, but their
business model has developed into managing the whole lodging property for hotel
proprietors. Let’s look at this more closely.
Initial Business Model of OYO Rooms
Oyo Rooms joined hands with property owners to advertise a part of their
inventory of lodgings under the OYO branding. However, to be accepted into the
OYO network, the owners needed to guarantee that their rooms affirmed to
certain defined benchmarks of quality.
used to pre-book a part of the hotels at a negotiated price. They would then
rundown these inventories on the Oyo platform under their very own branding (usually
under an expensive rate). The distinction between the price negotiated with the
hotel owners and the price, at which the rooms were sold to the end customer,
represented their revenue.
Current Business Model of OYO Rooms
Rooms has step by step moved its focus from being an aggregator to managing the
complete hotel property on the behalf of hotel owners. With these exclusive
tie-ups, Oyo presently sells the whole inventory of hotels under its very own
benefit by this tie-up because being listed on the OYO platform gives them more
traction (as Oyo is an established brand) and helps them acquire more business.
Other Revenue Sources
the one mentioned above, OYO also has some other sources of revenue that are
described as follow:
OYO Wizard is an exceptional membership program that was created by OYO to strengthen and
deepen customer relationships by providing profoundly appraised and curated
lodgings to its loyal customers at the best prices.
With the acquisition
of Roads Less Travels, OYO began marketing Holiday Packages through its app.
It has also
extended its product offerings to the booking of Wedding palaces and Banquet
halls under its platform.
It has also tapped
into the business of “homestays” like Airbnb on behalf of the
So, that was all about OYO business model.
Now, because you know how the company operates and brings money to the table,
let’s look into what you can learn from this amazing hotel booking app.
Key Takeaways from the Largest Brand
of Hotel Networks – OYO
Based on the requisites of its customers during their holiday
vacations, business visits or educational trips, OYO facilitates hotel rooms
with some standard of services. In order to grow your hospitality brand like
OYO, these simple but vital points should be kept in mind to allure your
1. Standardized Services– The hotels listed under OYO are
maintained with some standard of services that increase the rate of their
What you can pick from this? Whether you are working on
aggregator model or franchise model or any other business model, make sure the
services provided to the customers should not be sub-standardized as this not
only decrease your traffic but also badly impacts your brand value.
2. Budgeted Accommodation – The rooms are available for
the customers which are affordable and fall under their budgets which make OYO
customers more satisfied while their hotel stay.
What you can pick from this? The comfort of a customer starts
firstly from their pocket. If you are able to provide them some affordable
& discounted options, then the customers are surely going to visit again.
3. Skilled & compassionate team of employees- From the
time of post-booking till check-out time, utmost care is taken for the comfort
of customers. Be it locating the destination, check-in/ check-out formalities
or room-services, a team of compassionate employees is available. Valuable
feedback is also taken so that they are able to improve their services and
staff behavior for future customers.
What you can pick from this? Your employees have a great impact on the customers to increase their trust in the brand. Controlled monitoring and training should be given to achieve not only customer satisfaction but also the customer’s delight.
How Much Will it Cost to Make an App Like OYO Rooms?
Now that you know how OYO works and what business model it follows, its time to know how much will it cost you if you plan to start a business like OYO and want to develop a hotel booking app like OYO Rooms.
While you would be looking for an exact price quote in this section, but let me tell you that the answer to how much does it cost to make an app like OYO isn’t an exact value.
The expense to make an application changes dependent on various variables, including the features of the application, its tech stack, the hourly cost of the hired application developers, and the number of hours required for the development of a hotel booking app like OYO Rooms.
We, at Apptunix, charge something in-between $50K – $80K for a full-fledged OYO-like app development project.
This estimated price of developing a hotel booking app like OYO may vary dependent on the location and the size of the team you hire. So, you must look for OYO like app developers carefully to get a reasonable quote.
Started as a conglomerate of aggregate & franchise model, OYO
is now purely franchise model which has enhanced their occupancy rate up to
80%, as claimed by OYO rooms.
As a high-quality budget hotel network, OYO had a substantial
growth over the last few years. Though some critics claim this business model
has a higher churn rate but CEO – Ritesh Aggarwal has proven all the claims
wrong, as their brand equity and demand has increased along with the list of
hotel owners & investors.
In conclusion, we can say that for the budget hotel industry, OYO
is marking its own milestone and will be doing so in future as well depending
upon the customer’s experience.
If you want to craft the next big thing like OYO, contact us!
Nikhil Bansal is the CEO and Founder of Apptunix, a leading web and mobile app development company helping businesses in streamlining their processes with powerful and intuitive mobile apps. With extensive experience in iOS app development, he has established himself as a highly-focused Solution Architect and UX expert, the one who is always ready to make efforts in the direction where technology blends with lives.