Oyo Is Betting U.S. Strategy on Aggressive Dynamic Pricing
Oyo's dynamic pricing strategy could turn out to be a bit of a double-edged sword in the U.S., where the company faces greater competition. On one hand occupancy is sure to go up for many of its hotel partners, but if a majority of rooms are booked last-minute at incredibly low prices, hotel managers can start enduring some losses.
Oyo's dynamic pricing strategy could turn out to be a bit of a double-edged sword in the U.S., where the company faces greater competition. On one hand occupancy is sure to go up for many of its hotel partners, but if a majority of rooms are booked last-minute at incredibly low prices, hotel managers can start enduring some losses.
Oyo Hotels & Homes may be racking up the investment dollars to expand quickly outside of its home market of India. But the secret behind the company's early success is its use of data science to ensure high occupancy for its hotel partners.
Oyo changes hotel room rates 15 million times per day, according to CEO Ritesh Agarwal. Much of this practice is based on arriving train and flight schedules fed through computers. The more inbound travelers who are shown to be available by Oyo's software to book a room, the cheaper prices become.
"This ensures hotel partners get a good occupancy jump," Agarwal told Skift. "Our machines learn from human input [through artificial intelligence] so we can be the best option for customers with the best margins."