Authors

Richard Bursby

Partner

Read More

Jack Wain

Senior Associate

Read More
Authors

Richard Bursby

Partner

Read More

Jack Wain

Senior Associate

Read More

31 October 2019

Hospitality in the News - 31 October 2019

Your latest instalment of articles and opinions from across the Hospitality sector.

TW: thinkingdifferently

TravelTech is disrupting the Hotel industry once again. OYO - a Hotel company many of you have probably not heard of, or at best only be vaguely familiar with - is now the world's 3rd largest hotel group by rooms and all within 6 years…

This unprecedented growth, funded by SoftBank among others, has been achieved by utilising tech to quickly scale and have thousands of small, unbranded hotel owners around the world (initially in India, then China but now the USA, UK and Europe) sign up to OYO’s pricing and revenue management systems and be part of the “OYO brand”.

We certainly agree the potential for OYO to continue to grow is significant. Most hotel accommodation is not branded and there are hundreds of thousands of unbranded budget accommodation providers around the world who are not tied to big brands or part of any affiliation network. However, many sceptics question whether the model is profitable and sustainable and how you can deliver a consistent experience. OYO see themselves as the Uber of Hotels. Whilst an Uber Prius is pretty much the same wherever you are in the world, accommodation varies hugely.

In our view the jury is still out. Many "experts" dismissed Airbnb when it first hit the market and we should not do the same with OYO as it goes through inevitable growing pains of super-charged growth, but we also recognise that the focus today, post WeWork, is on profitable and sustainable business models. Inconsistent service delivery will turn off consumers back towards Airbnb and more traditional forms of accommodation. Consistent service delivery is probably OYO’s biggest challenge in our view.


Did you know?

This is where the England rugby team are staying this week…

Inside England's luxury hotel


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