Ritesh Agarwal, OYO Rooms : Aims To Do 1000K Booking Nights Per Month By Year End [Interview]

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Ritesh Agarwal, OYO Rooms : Aims To Do 1000K Booking Nights Per Month By Year End [Interview]

Oyo rooms recently raised a massive $100mn round led by Softbank. Here is an interview with Ritesh Agarwal, the founder and CEO of OYORooms talking about the company growth and future plans.


1. What has been the traction so far? How many rooms is OYO doing per day?

We are extremely encouraged by our growth and are currently at a run rate of 4,00,000 booked nights per month. We have built strong processes that are run by high quality teams and that has helped us scale very quickly. The biggest addition to our run rate has come from our app. It’s revolutionary in its own way as it’s the first time globally that there’s an app for hotel managers (no check in happens without the hotel app) similar to the Uber driver app.

This enables an easy to adopt app ecosystem which ensures extremely easy instant booking, turn by turn directions, check in, order tea/coffee, request room service and seamless check out. We are confident that by the end of this year we will be booking over 10,00,000 room nights per month.

2. What about mobile vs. desktop traffic / conversion ?
50% of our guests book OYO Rooms across 80 cities using the mobile app. Significant growth has been achieved on the app with more than 6,00,000 downloads just within 3 months since launch.

More than 10 business enabling apps such as hotel verification, standardization audit, quality audit, reconciliation and property performance trackers have been built and are running successfully across 12,000 plus rooms. For instance, the world’s first hotel audit app which is geolocation mapped by means of which we can on real time, identify and fix issues at a room by room level.

Our belief is that we are building a mobile-first company.

3. Plans going forward? Are you guys going International? What’s Next.Big.What for OYO?
When people buy a new smartphone they download Ola and Uber apps for commuting, Whatsapp for communication, facebook for social interaction and we see a future where they will download the OYO app for “staying when not at home”. That is the Next.Big.What for OYO.

OYO is a product that has never been built or attempted before anywhere in the world. It’s a “make in India” business that we take pride in and will be adopted by entrepreneurs and user globally. India is a very large business for us and we will explore international launches when the time is right.

Our processes are strong enough to activated 43 cities in a single month (July) despite the complexities that this model presents. Our long term plan is to be present in 250 cities across the country with 5,00,000 rooms extending our dominance in a market pioneered by us with a massive $100mn investment in demand, supply, technology and customer experience initiatives.

4. Typically, what’s the repeat purchase from customers?

About one third of our customers come back to us to stay again, a number much higher for the hospitality industry that otherwise also runs detailed loyalty programs.

We are able to cater to a variety of interesting use cases that were typically unsolved for, in the hotel industry. For example, during the recent Champions League matches, friends came together at OYOs to view late night matches. All they had to do was fire up our app, three taps and they had an OYO booked for the night. We run a robust customer feedback system consisting of 5 different channels, 24×7 to ensure superior experience to our customers.

5. Plans with the $100 MN? What do you think is the runway like? Will you guys start the fundraising process in 6 months (What’s the burn like) ?
We are very energized right now with our current funding and will focus on building great customer experience, new technology products and expansion across new cities as well as going deeper into current markets.

Comments (4)

  1. I have my own house with all facilities which meets OYO Guest room standard which sited at POONAMALLEE-Chennai in very decent area.So OYO can make use of this house for guest accommodation in Poonamallee area.

    CHENNAI – 600056

  2. Mynameistechie1

    It mentions “booked” nights a month. In a couple of interviews they have mentioned its a combination of bookings for same month and next month. Industry standard is 50% gets filled in same month so of 400000, assume 200000 which is 52% occupancy which is not bad overall and close to your estimate. Again that 50% could be 30-70%, so I am sharing what various brands have generally, this case might depend.
    Regardless I think this is meant to be a historic tipping point for an entire hotel industry in India, where we never got enough nice ones for less than 8K per night. But they certainly need to ensure they are adding more rooms, last time I was in Bangalore and Mumbai didnt find oyo there.
    Hope this helps.

  3. Haha they are definitely smoking something interesting coz this is a crazy growing startup. So I thought about what you said and here’s the math –
    I think the author here has talked about rooms booked at 400,000 and not the rooms used. People usually book hotel rooms much in advance, therefore for a given number of available rooms X, there will always be a number of booked rooms Y, and Y will always be greater than X as long as the hotel has kept future bookings open.

    PS. I am not a hotels guy but I love studying about start-ups and crunching data.

  4. With a runrate of 400,000 roomnights per month, on a capacity of 12000 rooms – your occupancy is 110%! Each month you are filling every single room for the listed properties!?!

    This must be a historic tipping point for an entire hotel industry in India, where average occupancy currently hovers anywhere between 44-70%.

    Btw, what were you guys smoking?

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