OYO aspires to do an IPO in 2022 and is looking at building those capabilities of technology offerings and tweaking its strategy
In a bid to keep costs in check and improve profitability, the hospitality unicorn OYO Homes and Hotels Ltd has turned to various technology offerings across markets to bring in efficiencies.
To improve customer and hotel partner services, the company, which had to halt its hyper growth strategy and restructure operations last year, is also using its tech stack.
Under its technology offerings, OYO first 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.
Secondly under its technology offerings, the firm, to help customers and property owners address grievances, launched its chat service OYO Yo! that was piloted earlier as OYO Assist. OYO said 85 per cent of all queries are now being routed through the chat service.
As the company to curtail costs and bring down owner complaints, next under its technology offerings, OYO plans to take its products and renewed technology playbook to all its international geographies.
Ritesh Agarwal, founder and CEO of OYO said, “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”.
“The view is to use this same technology offerings 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.
As OYO relies on its own algorithms to determine pricing of properties, OYO, in the past, has been accused by property owners globally of stifling commissions. OYO has allowed them to now change the price range by 10 per cent on its revenue management platform to give better control to property owners. Under its technology offerings, 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 Rs. 499, to get demand back.
Besides Saudi Arabia and UK, newer products like OYO Discover are present in OYO’s core India and South-east Asia (INSEA) markets, as it looks to scale them to all geographies. Its product that has already been scaled to 12 international markets is OYO Yo!
In its core market, India, bringing in technology in processes has also led the company to turn profitable at an EBIDTA level, said OYO.
Rohit Kapoor, CEO of OYO INSEA said, “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 at tightly controlling costs”.
To pull the plug on expansion in Latin America under its technology offerings, the pandemic had forced OYO, witnessing its biggest investor Softbank, exiting the joint venture. Curtailing costs of sales reps and manual operations, it has downsized and moved to a digital service model there.
A person, who was aware of the company plans and didn’t wish to be named, said, “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 capabilities of technology offerings and tweaking its strategy”.
“OYO seems to be playing a defence versus offense strategy earlier, as it parks its ambition to become the world’s biggest hotelier by technology offerings. 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.