India-based affordable hotel booking site, Oyo is all set to expand its presence in the European market and compete with the global market leaders.
In Aug 2019, the Gurgaon-based startup committed to invest €300 million in the business with an aim to strengthen its focus in Europe on Oyo Vacation Homes and the vacation rental market, given the increasing preference for vacation homes by customers around the world.
And now the world’s third-largest and fastest-growing chain of hotels, homes and living spaces announced that it has acquired Copenhagen, Denmark-based data science company Danamica to expand its ability to use pricing as a key differentiator for real estate owners and customers. Founded by Ritesh Agarwal in 2013, the Indian company also acquired Amsterdam-based holiday rental company Leisure in May this year and rebranded it to Oyo Vacation Homes.
With the acquisition of Danamica, OYO will be able to drive top-line growth by leveraging dynamic pricing across all its brands – OYO Home, Belvilla and DanCenter, all of them are already at the forefront of vacation rental pricing in Europe. This way, the company aims to create a level-playing ground even for an independent or small hotelier or homeowner. However, did not provide any financial details of the deal.
Maninder Gulati, OYO Vacation and Urban Homes Global Head and OYO Hotels & Homes Chief Strategy Officer said:
The acquisition of Danamica will help us be more accurate with pricing, leading to higher efficiencies and yield for our real estate owners and value for money for our millions of global guests, both everyday travellers and city dwellers, that choose an OYO Vacation Homes as their abode.
Here are 5 interesting facts about Oyo, for those who would like to know. Keep reading on.
Ritesh founded Oyo when he was not even 20
Ritesh Agarwal is the textbook example of a lack of formal education being no prerequisite for big success. At the age of 17, he became the youngest chief executive officer (CEO) in India. However, it didn’t last long.
After a lot of struggle, Ritesh, at the age of 19, came up with the idea of Oravel, the Airbnb clone, and changed his business to OYO Stays, a marketplace for branded budget hotels. Around the same time, OYO Stays received funding of ₹ 4 crores (approx €507K) from Lightspeed Venture Partners (LSVP) and DSG Consumer Partners, Singapore.
Oyo is racing to become the biggest tech hospitality chain, globally
Oyo has a grand plan to dominate the world hospitality through a combination of technology, proven business model up its sleeve. At present, Oyo is India’s largest hotel chain with 173,000 rooms under management and the world’s third-largest, with over half a million rooms and leases in 500 cities across 10 countries. Notably, the name OYO means “On Your Own”.
Oyo’s founder failed 6 times before succeeding
Founder and CEO Ritesh Agarwal has faced a lot of struggle before he hit a homerun with Oyo. In fact, at the age of 17, he went broke, spent nights on the stairs in New Delhi because his landlord wouldn’t let him in before he paid his dues.
Oyo business model has no international competition
Oyo is one of the Indian business-to-consumer internet startups that have expanded beyond the national boundaries. Having said that, the company has managed to show some encouraging performance in tough markets like China, where American biggies like Amazon, Google and Uber have either given up on or continue to struggle with. Notably, Oyo has also managed to increase the occupancy from 25% to 65% in less than three months on an average in countries they operate.
Additionally, the US company Airbnb invested around $150-200 million (approx €137-183 million) in Oyo. Beyond money, Airbnb also offers a goldmine of expertise, giving its experience in running an online hospitality business across several countries. On the other hand, this deal could boost Oyo’s revenue as Airbnb will now be listing the Indian company’s accommodations on its platform.
Oyo sees one room booked in every 3 seconds
As per the report, an Oyo room is booked once every three seconds. In its first year of operation, Oyo secured revenue of Rs 32.86 crore (approx €418K) and a steep loss Rs 496.31 crore (approx €6.3 million). Furthermore, Oyo saw its revenues climb up to 245 percent while losses widened marginally from Rs 355 crore to Rs 360 crore.
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