OYO could overtake Marriott as world’s largest hotel group by early 2020
Ritesh Agarwal, one of this decade’s most inspiring hospitality entrepreneurs.
Marriott’s place at the top of the global hospitality league could be under threat from relative newcomer OYO.
After just five years, Indian hotel chain OYO is headed for the big time: to take the top spot as the world’s No. 1 hotel operator by room count.
This could knock hospitality giant Marriott off the top of the leaderboard by as early as the start of the coming year.
OYO CEO Ritesh Agarwal recently was quoted in a Bloomberg article and had this to say about his success.
OYO set for world domination
Since its inception in 2013, Indian hotel chain OYO Rooms has tried to fill a gap in India’s hotel market, and with almost unprecedented success.
Valued at $10 billion, OYO has gone from one hotel in Gurgaon to 44,000 properties with a total key count of 1.2 million on four continents, with the brand currently opening an incredible 70 to 80 hotels every day.
This activity has set the brand on course to dethrone hotel goliath Marriott as the world’s biggest hotel operator by room count in the coming months.
A model for success
OYO founder and CEO Ritesh Agarwal formulated the concept for OYO after travelling around India when he was 19 and noticing that there was an entire segment of the hospitality industry that could be vastly improved.
He saw an opportunity in the large array of hotels with less than 150 rooms which were ignored by big name brands, and since then has set about taking on these properties and implementing sweeping standardisation exercises to bring them in line with international standards of service and design.
Tricks of the trade
Agarwal says the key to OYO’s success is a mixture of efficiency in design, maximising occupancy rates and generating repeat business. One of the tricks he has found most useful is to position OYO as a boutique brand by putting a picture of Marilyn Monroe in the guest rooms, a wily move that has increased RevPAR by over 10%.
Efficiency also comes in the redesign of existing properties to come in line with OYO’s brand standards, something which can be done for as little as $500 per room in India and China, and for $1000 in the US.
This allows OYO to rebrand its chain hotels much faster than normal, enabling them to add rooms at lightning speed. They also incentivise customers to leave their room tidy by giving them a customer rating, meaning that housekeeping duties are kept to a minimum.