In an exclusive interview, Ankit Gupta of OYO Life shares his views on the impact of Covid-19 on the co-living segment and their strategies to cope up with the crisis.
The spread of Coronavirus and the resultant lockdown have impacted almost all industries across the world, including real estate. However, the co-living space, unlike other sectors and industries, has shown great resilience during this crisis. With safety and hygiene continuing to be the top priority of customers, more and more students and working professionals will look at moving to organized setups now. At a macro level, the economic and job uncertainty will also shift consumer behaviour to rental accommodations instead of buying, says Ankit Gupta, Chief Operating Officer & SVP – Frontier Businesses, OYO India and South Asia, who is currently leading OYO Life, OYO’s long-term rental housing business designed to cater to the needs of modern professionals. OYO Life offers stylish and functional spaces under private and shared formats at affordable prices with an end-to-end app-enabled stay experience, and currently operates across nine cities with 350+ buildings.
In an exclusive interview with Sanjeev Sinha, Ankit Gupta shares his views on the impact of Covid-19 on the co-living segment and their strategies to cope up with the crisis. Excerpts:
COVID-19 has majorly affected all industries. What are OYO Life’s strategies to cope up with it?
The co-living industry, unlike other industries, has shown great resilience during this crisis. With a large section of OYO Life residents continuing to stay with us, we estimate the effect of the pandemic to be temporary. Our teams across the business are continually innovating new ways to ensure the safety and hygiene of all our residents.
- Over the last couple of months, we have introduced virtual tours with video conferencing tools to showcase our properties to prospective clients and answer their queries without having them step out of their homes
Contactless bookings: Customers can search for co-living buildings on OYO Life app, based on their preferences (such as distance from office & amenities available in the building), select the room and bed of choice, provide KYC details and complete the end to end booking process online.
- Additionally, we are also providing an option of private rooms to our customers catering to their demand and needs of safe and hygienic accommodation and have seen this picking up over the last couple of weeks.
We have upgraded the wi-fi plans to ensure higher internet bandwidth in all our buildings to cater to the work from home demands in the current situation.
- We have also upgraded our kitchen facilities to enable residents to prepare food in a safe, hygienic environment.
- To ease the burden on the wallet, we are offering customers a deferred security deposit plan. Under the plan, residents can check-in without depositing security payment and can be submitted after completion of one month of stay.
Further, as a responsible corporate, we have been working extensively with the government to provide hygienic and safe accommodation under self-quarantine/isolation facilities to health care professionals and frontline workers across select OYO LIFE buildings.
As part of our customer outreach campaign, we are offering our services to residents who have been asked to evacuate their existing PGs and rental accommodations. We continue to receive positive feedback from many such new residents who have moved into OYO Life buildings from unorganised segments such as PGs and other rental accommodations.
Are you experiencing a drop in occupancy levels at least for the short-term, due to concerns over social distancing and uncertainty in the job market?
We’ve witnessed a short term shift in consumer behaviour where some working professionals moved to their hometowns initially. With restrictions relaxed and workforce returning to work, we are witnessing a gradual increase in demand month-on-month basis.
We are seeing demand from residents currently living in unorganised PGs looking to move to organized set ups, corporates who are opting to house their staff closer to the workplace in safe and hygienic buildings and certain pockets of workforce returning to work.
Could you highlight the trends that the business is witnessing ?
- Safety and hygiene are the top-most priority for customers. We have seen several instances where working professionals have moved from their PGs/unorganized rental setups to OYO Life due to the strong assurance of cleanliness and hygiene through our ‘Sanitized Stays’ program.
- With uncertainty in the real estate sector, individuals aren’t looking at investing in homes; hence, the demand curve is expected to go higher for co-living spaces, especially in the metros. Customers are selecting properties based on their commute time and the proximity of OYO Life buildings to commercial hubs and office spaces is an advantage for our residents.
- With unpredictable job scenarios, transparent and simple contracts with easy terms & conditions are driving co-living demand
- We are witnessing an increased demand for private room set-ups with close to 40% of customers opting for private spaces.
- Many customers are opting for virtual show arounds where our property staff conducts a show around over video conferencing while showcasing the property.
- Many corporates are willing to sponsor stays for their employees so that the employees can live closer to the office under a safe and hygienic set up and we expect this trend to continue.
What are the preventive measures which your brand is taking to ensure the highest levels of safety? How would you ensure 100% customer satisfaction keeping in mind all the COVID-19 preventive measures?
Customer behaviour is changing across the co-living industry with hygiene, safety standards and minimal-touch SOPs becoming the norm. As a responsible rental housing business, OYO Life has implemented the following measures:
# Sanitised Stays with minimal touch
To ensure social distancing, we have implemented a minimal touch process covering all aspects of existing residents as well as new customer management. Training of on-ground teams under minimal touch SOP includes:
- Temperature based health screening for residents, staff as well as any prospective customers.
Proper and frequent sanitisation of common spaces
- Placement of hand sanitisers at the reception and other common access points.
- Property staff to wear masks and gloves at all times.
- External vendors are allowed only when necessary with specific protocols in place.
- Change in cafeteria/common area layout to ensure social distancing guidelines are met.
- Strict protocols related to any visitors of residents staying in the property.
- Staff training to operate common access points such as lifts, main gate, common hall, etc.
- Protocols put in place for supporting quarantine measures for symptomatic residents while creating minimal impact on other residents.
# COVID-19 Awareness:
- COVID-19 related helpline numbers and awareness material is displayed at the reception and inside the resident’s rooms along with emergency contact numbers and details of the nearest hospitals.
- We continue to communicate regularly to our new and existing customers on the do’s & don’ts via the app, email and messenger.
How are you planning to cope up with low rental yields ? Your comments on the business operations and model?
Our philosophy for OYO Life is to build a long-term sustainable business model which protects the interests of our customers as well as our asset partners. We have been continuously innovating business models which incentivize our asset partners to provide the highest levels of service to the residents.
With lowering rental yields, many asset partners have entered into a revenue sharing model instead of traditional fixed lease. Partner returns are, therefore, linked to occupancy & we continuously engage with them to help them set up infrastructure and service standards that enable a high-quality stay-in experience for our residents. Satisfied and happy residents continue to stay for longer periods and drive up occupancy, thereby increasing the returns for the asset partner.
What are you training your staff and employees to tackle the post Covid scenario?
We have conducted special training for all staff and property managers to ensure that the highest levels of hygiene and cleanliness is maintained across buildings at all times. The training includes precautionary measures such as daily temperature checks for both staff and residents, discouraging usage of commons areas, deep-cleaning of all buildings as well as the optimum use of sanitizers, gloves, and masks. Our staff is trained to ensure proper sanitisation of buildings as well as maintaining social distancing with the residents. We’ve also provided PPE kits to our staff members.
Further our staff is specifically trained to support quarantine measures for symptomatic residents while creating minimal impact on other residents. With new customers wanting to minimize visits to properties, we have also trained out staff to conduct virtual show around using their mobile devices.
How do you see the growth of this segment going forward?
The current organized co-living market is sub 5% of the overall co-living space. With safety and hygiene continuing to be the top priority of customers, more and more students and working professionals will look at moving to organized setups like OYO Life. At a macro level, the economic and job uncertainty will also shift consumer behaviour to rental accommodations instead of buying. Further, post unlock we have also seen a positive trend in demand with a clear preference for properties which are close to commercial hubs/tech parks.
Given these tailwinds and the large headroom available for growth, we believe that organized players will grow much faster to take a larger share of the overall co-living market.