World Panel
Viewpoint12 November 2019

Is OYO Hotels the next WeWork of the hospitality industry?

Digital Marketing in Hospitality

— 8 experts shared their view

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Is OYO Hotels the next WeWork of the hospitality industry?
This viewpoint was created by
Max Starkov, Adjunct Professor NYU Tisch Center for Hospitality and Hospitality & Online Travel Tech Consultant
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Max Starkov
Adjunct Professor NYU Tisch Center for Hospitality and Hospitality & Online Travel Tech Consultant

OYO Hotels' meteoric rise resembles a great extent the hyper-growth of WeWork. The question is: Is this rapid growth a good thing, especially in a traditional industry like hospitality? I believe Oyo's growth came at the expense of cutting corners, some big corners at that.

Technology: Oyo's mandated cloud PMS is basic at best, lacks the depth and breadth of functionality expected from a PMS today and “often crashes.” Oyo's Channel Manager and CRS are basic at best, hoteliers complain Oyo's APIs with third-parties do not synch availability and pricing in a timely manner.

Business Model: Oyo's obsession with boosting occupancy at any cost by lowering rates even in peak demand at the expense of ADRs is against basic principles of economics and time-tested industry best practices.

Brand Equity: Oyo has no brand recognition, at least not in North America, which forces it to distribute its franchisees' inventory primarily through the major OTAs, Airbnb and the bed banks. Where is the value here to the hotel owner? Why do you need Oyo for your property to be on Expedia or Hotels.com - all you need is a Channel Manager like SiteMinder, which comes at a much lower cost. 

How sustainable are Oyo Hotels with all of the above deficiencies, without a serious Book Direct strategy, without a repeat customer base of 50%-55% of room nights booked, without a recognized loyalty program? Oyo Hotels is clearly another WeWork in the making, so hoteliers beware!

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