Is OYO Hotels the next WeWork of the hospitality industry?


Is OYO Hotels the next WeWork of the hospitality industry?

November 26, 2019

Vizergy’s Director of Client Services, Ross McAlpine, weighs in on HospitalityNet’s latest world panel. Hear from him and a handful of other experts about whether or not they think OYO Hotels is the next WeWork of the hospitality industry.

“We should acknowledge Ritesh Agarwal’s achievement as a young entrepreneur who has built a successful global business in six years that other hotel chains have struggled to achieve in 50+ years. OYO is the fixer-upper of hotel chains. They do very fast, cheap makeovers to get the bare basics of a consistent brand and then get properties selling asap in order to receive their 25% commission which they need to pay back investors like Softbank who are underwriting much of the cost to renovate properties. The commission model makes OYO more like an OTA than a hotel chain, perhaps that’s what made it desirable to SoftBank in the first place.

The operational kinks will be worked out because budget hotel rooms have to offer a good guest experience, just like everyone else. That positive guest experience will be needed if they are to increase brand awareness and encourage loyalty to reach their growth targets. I expect an IPO within the next 2 years so it’ll be a race to expand the OYO business as they work towards that, although they deny that’s being planned at the moment.”

You can read the full world panel here.

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