OYO has announced that it hit unit profitability at an aggregate level across its presence in 170 cities of India. OYO had operating profits until June 2015, following which, it went into expansion to gain market leadership. Since February 2016, the company has regained profitability at network level.
Speaking on this development, Ritesh Agarwal, founder and CEO, OYO, said, “OYO’s strong performance is the result of our sharp focus on the quality of guest experience. We have utilised our technology, data science capabilities and the benefits of scale to achieve high number of repeat guests and growth in OYO’s brand recognition.”
“Our team delivered 15x YoY growth with 2.3 million booked room-night transactions in Q1 2016, while our GMV continues to grow aggressively every month. Our own sales channels such as app, web and call-centre conrtibute to 95 per cent of our traffic. The cities driving profitability for us are those that have matured over the last year which include Gurugram, Delhi, Hyderabad and Kolkata. We plan to grow deeper in all key business and leisure cities and triple our inventory by December 2016.”
Ritesh suggested that profitability has come from innovating revenue-sharing models, deep understanding of markets and enabling new demand growth channels. These, coupled with a strong data science driven approach, is said to have helped OYO to dynamically control occupancy and room pricing. He said, “Far from being a hindrance, our large network and scale allow us to adopt a pricing portfolio approach and provide a wide inventory-choice for the guest. Our real-time demand prediction engine balances revenue management versus an all-out discounting approach. This makes us the majority source of demand for our hotel partners and enables relationships that secure a superior experience for OYO’s guests.”