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The Inspiring Story of OYO- On the Path of Becoming the World’s Largest Hotel Chain


The logo of Oyo Rooms
The logo of Oyo Rooms (Picture credit: Wikimedia Commons

Hello, welcome to Youth Motivator, here I would like to tell you the success story of Ritesh Agarwal and his start-up OYO.

Introduction

Ritesh Agarwal is the founder and CEO of OYO. He is of 25 years. He was born in Bishama Katek, Orissa, India in the year 1993.
Now OYO has around 450,000 rooms, in several countries like India, China, United Kingdom, Japan, UAE, etc.  OYO is already the Asia’s largest hotel chain with around 90 per cent occupancy rate. Today, the net worth of Ritesh is 37,36,72,000 USD.

How all of this started?

From his childhood Ritesh wanted to become an entrepreneur. He got to know about the term entrepreneur from his elder sister, who once attended the entrepreneurship fest in an engineering college.
He did not know the meaning of entrepreneur, so he looked for this word in Oxford Dictionary and found that an entrepreneur is somebody who solves a problem and makes a business along with it.
Ritesh was so captured of becoming an entrepreneur that he told everyone that he would become an entrepreneur when he grew up.

He grew up seeing the boarder Indian start-ups and was a hungry young teenager, who wanted to solve problems and make a living by it. In his teenage years, he founded a small company by name Oravel in the year 2012.
Ritesh initially travelled to Haryana, where he used to identify many small hotels which had very low occupancy rate and used to negotiate with the hotel owners to allow them to do his business, but as he was a teenager many rejected him. His business plan was to rent those unoccupied hotel rooms and earn a commission.
But Ritesh used to deal in such a way that the reluctant hotel owners had to listen to him, he used to say if this business incurs losses, he will take complete responsibility. But if this business model ran successfully and if it made profits, then profits will be shared.
After completing his school education, he was given freedom to go to any part of the country to pursue his further education.
So, Ritesh went to Kota, Rajasthan because it was near the capital of India, New Delhi where he can attend conferences on entrepreneurship. Everyone thought that Ritesh was into engineering but he was into entrepreneurship.
 Another reason for him to choose Kota is that this place was far away from his home town, which allowed him to focus only on his job without his family’s interference.
He was greatly inspired by entrepreneurs like Rahul Bhatia and Sid Lal both were doing amazing things like managing Royal Enfield and Indigo Airlines, the consumer friendly Indian companies which gained popularity worldwide.
He used to attend every seminar, sessions and courses on entrepreneurship. Ritesh always craved to do something novel and unique.

Ritesh used to travel a lot all over India and he noticed that almost all the small-scale hotels did not have proper maintenance, and were mostly unclean and provided very bad experience to the customers. Also the check-in and check-out for consumers were not good.
He saw an opportunity in this problem and decided that he will provide great living spaces at very affordable prices at convenient locations for everyone.
Ritesh surrounded himself around entrepreneurs because he wanted to grow as an entrepreneur, unlike any normal school kid. So he moved to Delhi, where he used to work for entrepreneurs and return to Kota only to attend his examinations. Luckily, he used to score well in his examinations.
He later applied for Thiel fellowship. Here, a hundred thousand dollars will be provided to 20 young people across the world on a condition that they must drop out of college. Ritesh was the first Asian to get selected for Thiel fellowship amid severe competition from all across the world.
Later as the part of this program he moved to USA, which changed his mind-set in more than one way-

Think big-

He encountered many entrepreneurs in United States who wanted to be the biggest and best in the world in their field. He saw a small entrepreneur, with only 20 consumers who was aspiring to get very big. So, Ritesh realised the big scale of ambition.

Be innovative-

In India many companies gave much importance to Global Comparison (GC), which often compared to other companies in different parts of the world.
But in US, Ritesh noticed that everyone was busy building their own new things which had global impact and solving problems without comparing themselves with anyone.
He later came back to India in the year 2014, because Ritesh wished to solve problems in India by becoming an entrepreneur.
Ritesh says that opportunities are everywhere; one must be ready to grab them.
So, he decided to enter into leasing and franchising small hotels in India. In the year 2016 during the economic recession period, Ritesh decided that instead of being an aggregator, OYO will act as a full-scale leasing and franchising company. Luckily, this project was a run-away success for both OYO and its hotel partners. OYO was started in the year 2013.
Now, Ritesh owns the fastest growing hotel chain business in the world. Apart from India, he also has huge business in China.
He initially bought toiletries and other necessary items from nearby market and with its help he used to upgrade the hotel rooms. He decided to scale up this business model in order to gain more profits, which is when he established OYO, it refers to On Your Own.

The Role of Technology-

 He took the help of technology vividly. Due to which OYO gave higher revenue as customer experience was also very good, they began to repeatedly select OYO. With the help of modern technology, OYO is operating at a very rapid pace and very efficiently. Since his childhood, Ritesh was very well-versed in technology so much that in his school days, he used to practices coding.
This helped him to develop the best software tools for his company. For example, by using a OYO application a customer can book a hotel room within 5 seconds.
This resulted in good profits for both OYO and the hotel owners, who began to associate with OYO more often and they also used to refer OYO to other hotels. For all these technological support OYO is employing the best engineers from the various prestigious institutions like IIT (Indian Institute of Technology), etc.
OYO uses proprietary application for its employees by which the managers can estimate the price of a particular hotel room in any part of the world.
The world has recognised the success of OYO, as a result similar business models (copycats) are mushrooming up in several parts of the world.

The reasons for success of OYO-

Ritesh recognised that many customers wanted great quality hotel rooms for affordable prices at convenient locations. So, he noticed that many small hotels which were mostly unbranded were not making good businesses, so he converted those unbranded hotels into branded hotels, which began to provide good experiences to customers at affordable rates.
He realised that many businesses focus only on big hotels with more than 100 rooms, but in real world majority of hotels are of small scale, with less than 100 rooms. And no one is focussing on these small hotels, so OYO stood behind these small hotels. And also partnered with many such small hotels.
OYO assists small hotels in each and every way possible in almost all areas like staff training, helping them to maintain uniformity, quality and standardization in very cost-effective manner. Here, OYO functioned as an aggregator of small hotels.

Customer is God-

The main pillar in the success of OYO, is that OYO claims complete responsibility for customer experience and satisfaction. OYO greatly strives to improve customer experience by helping them to easily book a hotel room, check-in, and check-out and thus OYO provides state-of-the-art experience to its customers.
The only thing the hotel owner needs to do is to properly maintain the hotel, so it looks clean and tidy and modern.
OYO mainly provides predictable experience to the customers. While booking a hotel room, the customer is shown an image of the hotel room and OYO strives that the standard and facilities shown in the image are exactly met.
OYO performs extensive auditing of each and every thing and sees which practice is bringing best outcome, and repeats this practice on a very large-scale.
The OYO’s auditors regularly check hotels on more than a hundred parameters or points, and if any one of the defined parameter doesn’t meet, then OYO doesn’t allow the booking of that particular room until the problem is fixed.
For acquiring new hotels and partners and to establish business with them, OYO utilises teams of people who are good in business dealings.
OYO is expanding at such rapid pace, all thanks to technology, which helps both its customers and business partners, business deals are done at a rapid pace through mobile apps.

The other reason for success of OYO, is that OYO values its customers feedback and tries to implement them. OYO provides its customers with various technological tools, by which customers can loge complaints and give feedback. The appropriate action will swiftly be taken.
OYO not only cares for its customers, it also respects and trains it employees so much that it has very negligible attrition rate. None of its CXOs have left the company since its inception.
 OYO has set up over 25 Skill and training, R and D and Renovation institutes for its employees. These skill institutes employ more than 100 thousand Indian employees and 60 thousand Chinese employees.
Ritesh Agarwal has taken an Indian start-up to the global level. He says that all this became possible only with perseverance and discipline.
Ritesh says that doing the things which work for you very well should be 80 per cent of task and remaining 20 per cent must be spent on innovating new things. By doing so, you will be able to build required scale and impact. He says that one must strive for excellence in his work in order to get succeed. Ritesh is motivating many young entrepreneurs to realize their dreams.

Thank you very much for reading. Please visit and share the content and please follow this blog as I will be updating my blog on a very regular basis with interesting information. And also subscribe to my blog.
Feedback from readers is highly appreciated; it helps me to deliver better results to you.

Once again thank you for your time.

Comments

  1. Good job Mr Naveen
    This article is good and with clear message
    I intrested to see more articles from you .

    ReplyDelete
    Replies
    1. Thank You very much for your compliment. I will definitely post such articles on a very regular basis.

      Delete

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