Dallas, Texas
Global travel tech company OYO’s US business witnessed a 48% growth in revenue from bookings on its own platform, such as the app, website, mobile web and call centers in Q4 2022 vs same period in 2021. OYO’s app led the growth with a 99% surge in revenue from bookings in Q4 2022 vs same period in 2021. The company had earlier disclosed that its app is the second most downloaded travel app with over 100 million downloads globally. Growth in revenue from bookings via the company’s call centers saw a 59% increase for the same period.
Talking about the improved direct demand, Gautam Swaroop, CEO OYO International said, “US is a highly competitive travel & hospitality market. Driving revenue from bookings onto one’s own platform and channels is always a demanding task. While bookings through online travel agents such a Booking.com and Expedia.com play an important role in increasing revenues for our hotel partners, direct demand through OYO’s own platforms leads to better margins for our hoteliers. We have improved direct bookings through simple yet effective measures to bring in operational efficiencies and create a strong business impact. We saw a 3x growth in app conversions and a 2x growth in conversions from the call center using product, price optimizations and by creating operational efficiencies, performance management & better incentive structures in the organization.”
Nikhil Heda, Head of Business Development, OYO USA added, “We have focused on things that matter to travelers while planning their stays and improving reach and readability of our communication. As a result, we have seen 1.4X growth in our email opens and 2X growth in click throughs of notifications on our app. This has resulted in a significant improvement in demand via OYO’s own channels. Optimizations such as focusing on the right SEO keyword and improving property reviews on Google have also resulted in improved direct bookings, in turn resulting in substantial savings in OTA commissions for our owners.”
Commenting on their experience of working with OYO, Ajay Patel, owner of OYO Hotel Eloy Casa Grande, Arizona said, “We have been seeing 1.5X growth in RevPar from bookings via OYO’s app and call center. Over the last 6 months this has resulted in us paying lower commissions. Typical OTA commissions range anywhere between 15% to 18% and reduced reliance on other channels have helped us save over 50% of the commissions.”
OYO offers hotels access to a large base of regular customers through its app and website, and also lists hotels on multiple Online Travel Agents (OTAs) to boost booking demand and, revenue. OYO’s best-in-class Artificial Intelligence-enabled pricing software automatically drives the best booking prices across all channels, based on room type, seasonality and other factors, therefore, enabling such increase in online revenues.
Earlier this year OYO said that it is planning to add over 100 hotels in the US in 2023. This is nearly double the number of hotels the company added to its portfolio in 2022. OYO will focus on adding more hotels in the states of Oregon, Washington, Texas, Oklahoma, Georgia and Florida. Texas continues to be the largest and fastest growing market for OYO in the US, while it also has sizable concentration of hotels in Oregon, South and North Carolina, Florida & Georgia. In 2022, the company saw a ~23% increase in new hotels added to its portfolio in the US vs 2021.
OYO has started offering hotels the flexibility of not having to invest heavily in redoing the hotel to join the OYO platform, something that other budget hotel chains insist on. Therefore, the initial investment to join OYO is minimal. It has been focusing instead on standardizing service led components such as customer support and booking experience.
The company helps ensure great experience for customers, with ease of search and a quick booking experience, highly competitive room prices as per market demand patterns, automated tools such as Artificial Intelligence powered chatbots to quickly resolve customer queries, loyalty programmes and easy refund, if needed.
OYO’s US operations recently announced that it has outpaced the budget hotel segments growth in per available room revenue (RevPar) with an 18% rise in 2022 vs pre-covid year, 2019. The budget hotel segment in the meanwhile, grew by only 6% in the US.
Disclaimer: Oravel Stays Limited is proposing, subject to applicable statutory and regulatory requirements, receipt of requisite approvals, market conditions and other considerations, to make an initial public offering of its equity shares (the “Equity Shares”) and has filed the Draft Red Herring Prospectus (“DRHP”) with the Securities and Exchange Board of India (“SEBI”).
The DRHP is available on the website of SEBI at www.sebi.gov.in, websites of the Stock Exchanges, i.e., BSE Limited and National Stock Exchange of India Limited at www.bseindia.com and www.nseindia.com, respectively, and is available on the websites of the Global Coordinators and Book Running Lead Managers, i.e., Kotak Mahindra Capital Company Limited, J.P. Morgan India Private Limited and Citigroup Global Markets India Private Limited at www.investmentbank.kotak.com, www.jpmipl.com and www.online.citibank.co.in/rhtm/citigroupglobalscreen1.htm; the websites of the Book Running Lead Managers, i.e., ICICI Securities Limited, Nomura Financial Advisory and Securities (India) Private Limited, JM Financial Limited and Deutsche Equities India Private Limited at www.icicisecurities.com, www.nomuraholdings.com/company/group/asia/india/index.html, www.jmfl.com and www.db.com/India, respectively. Investors should note that investment in equity shares involves a high degree of risk and for details relating to the same, refer to the Red Herring Prospectus which may be filed with the Registrar of Companies in the future, including the section titled “Risk Factors”. Potential investors should not rely on the DRHP filed with SEBI for making any investment decision. The Equity Shares offered in the Fresh Issue (as defined in the DRHP) and the Offer for Sale (as defined in the DRHP) have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”) and, may not be offered or sold within the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws. Accordingly, the Equity Shares are only being offered and sold (i) within the United States only to “qualified institutional buyers” (as defined in Rule 144A under the Securities Act) in transactions exempt from, or not subject to, the registration requirements under the Securities Act, and (ii) outside the United States in offshore transactions in reliance on Regulation S under the Securities Act and pursuant to the applicable laws of the jurisdictions where those offers and sales are made. There will be no public offering of the Equity Shares in the United States.
