Unlocking Success: A Vision for OYO Hotels' Future Growth
Embrace the opportunity to shape the future of OYO Hotels as a Business Development Manager in Los Angeles. Join the team in driving innovation, profitability, and expansion to new horizons. Explore the challenges, solutions, and value creation strategies that define OYO's unique position in the hospitality industry. Discover the secrets behind OYO's success and learn how to contribute to its mission of providing quality living spaces worldwide.
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OYO Hotels A ladder to a bright future! T U K V i s i o n C o n s u l t i n g TUK Vision Consulting Create Visions for Future Success. Anne | Caroline | Jim | Marcel Technische Universitaet Kaiserslautern
Our Vision Yoursand OYOs Mission Be one of the creative heads at OYO business development and help OYO to be the number 1 in bringing quality living space to billion plus people!
Our key recommendation is to T U K V i s i o n C o n s u l t i n g apply for the job as a Business Development Managerin Los Angeles to influence the company by actively engaging in the current expansion in the U.S. with the existing franchising model by adding new revenue streams to turn for profitability and by striving for new visions like expanding to Europe. 9/22/2024 3
Key issues T U K V i s i o n C o n s u l t i n g 1 Rising number of competitors 2 No profitability 3 Criticism of founder 3 Apply for a job 9/22/2024 4
Todays agenda T U K V i s i o n C o n s u l t i n g 1. Analysis 2. Alternatives & Evaluation 3. Implementation 4. Financials 5. Risks & Mitigation 9/22/2024 5
How OYO creates value T U K V i s i o n C o n s u l t i n g Franchise Model - Transforming unbranded Key Activities hotels through property renovation Customer Relationship Enabling people to sleep in a clean bed and save environment Target group: Millennials Value Proposition at low costs while experiencing the world Key Partner Customers But having a bed for every traveller Key Resources Channels Upfront Payment by franchisees ($50,000) Commission payment (~20%) Cost Structure Revenue Streams 9/22/2024 A n a l y s i s A l t e r n a t i v e s & E v a l u a t i o n I m p l e m e n t a t i o n F i n a n c i a l s R i s k s & M i t i g a t i o n 7
OYO secret sauce are well designed hotel rooms at low prices T U K V i s i o n C o n s u l t i n g OYO s hotel rooms contain: Flat screen Tvs, Free Wifi, Air conditioning Modern & clean bathrooms, quality lines Free Breakfast 24/7 customer support Prices (in the US): $30 $60 dollar per night $ Prices are as low as the cheapest motel prices Dynamic pricing Value Add tough technology like: Check-in tablets Poster real-time photos of the rooms OYO provides a unique customer experience at a low budget to travelers. Value is added through technology 9/22/2024 A n a l y s i s A l t e r n a t i v e s & E v a l u a t i o n I m p l e m e n t a t i o n F i n a n c i a l s R i s k s & M i t i g a t i o n 8
OYO creates value for Millennials T U K V i s i o n C o n s u l t i n g 24 years Wants to travel the world and experiences different cultures Does not have that much money Interested in Technology Julia Values comfort while traveling and safety Wants to book hotel rooms that are not to expensive Julia s Needs: The fit between the customers needs and OYO s offerings great 9/22/2024 A n a l y s i s A l t e r n a t i v e s & E v a l u a t i o n I m p l e m e n t a t i o n F i n a n c i a l s R i s k s & M i t i g a t i o n 9
Increasing number of global stayed room nights T U K V i s i o n C o n s u l t i n g Global stayed room nights 80 70 60 50 40 30 5,7x 20 2,2x 1,5x 10 0 Dec. '15 Dec. '16 Dec. '17 Dec. '18 Global stayed room nights OYO can profit from rising global stayed room nights 9/22/2024 A n a l y s i s A l t e r n a t i v e s & E v a l u a t i o n I m p l e m e n t a t i o n F i n a n c i a l s R i s k s & M i t i g a t i o n 10
Competition on the US market is high T U K V i s i o n C o n s u l t i n g Uniqueness of experience Hotel market control in % high 29 Tru by Hilton OYO 71 Inn by Windham Branded hotels Unbranded hotels Choice Hotels The power of unbranded hotels is low Holiday Inn Express low Cost s + After year on the market OYO already opened 50 hotels in 35 US cities low high Competition on the US market is high but OYO can compete on it through it s unique positioning. 9/22/2024 A n a l y s i s A l t e r n a t i v e s & E v a l u a t i o n I m p l e m e n t a t i o n F i n a n c i a l s R i s k s & M i t i g a t i o n 11
OYO has the potential to expand on the US market T U K V i s i o n C o n s u l t i n g 50 hotels 35 cities $300 million 65 % For Entering the US market After year on the US market Occupancy increases from 25% to 65% within tree months when joining OYO OYO can profit from it s financials and experience when entering the US market 9/22/2024 A n a l y s i s A l t e r n a t i v e s & E v a l u a t i o n I m p l e m e n t a t i o n F i n a n c i a l s R i s k s & M i t i g a t i o n 12
Wrap-Up T U K V i s i o n C o n s u l t i n g Providing a great customer experience that suits the customers needs Differentiation from other hotels through technology and customer service Growth staggering of OYO Spot for Millennials S O Not profitable yet Criticism of founder High competition W T 9/22/2024 A n a l y s i s A l t e r n a t i v e s & E v a l u a t i o n I m p l e m e n t a t i o n F i n a n c i a l s R i s k s & M i t i g a t i o n 13
Alternatives & Evaluation
Several alternatives to gain success in the future T U K V i s i o n C o n s u l t i n g 1. Decision for the future of Michel: 1 Application for a job at OYO 2 No application for a job at OYO 9/22/2024 A n a l y s i s A l t e r n a t i v e s & E v a l u a t i o n I m p l e m e n t a t i o n F i n a n c i a l s R i s k s & M i t i g a t i o n 15
Decision criteria's for success to assess the alternatives T U K V i s i o n C o n s u l t i n g You want to have a career shift after four years as a junior investment banker Career- shift High decision power You can join a young company with grow potential and a lot of You want to have the opportunity to be next to your family home in Washington Close to family opportunities New challen- ges You want to gain money after a hard & expensive MBA studying You want to join a company with grow potential to get new challenges Gain money 9/22/2024 A n a l y s i s A l t e r n a t i v e s & E v a l u a t i o n I m p l e m e n t a t i o n F i n a n c i a l s R i s k s & M i t i g a t i o n 16
Apply for the job to be successful in the future T U K V i s i o n C o n s u l t i n g Career-shift Close to family Gain money New High Decision challenges Weighting 40 % 5 % 15 % 20 % 20 % Application No application Low High Medium 9/22/2024 A n a l y s i s A l t e r n a t i v e s & E v a l u a t i o n I m p l e m e n t a t i o n F i n a n c i a l s R i s k s & M i t i g a t i o n 17
Several alternatives to gain success in the future 2. Decision for the future of Michel Which job at OYO? T U K V i s i o n C o n s u l t i n g 1 HR Director, Dallas 2 Field Sales Representative 3 Business Development Manager, LA 4 Territory Operations Leader 9/22/2024 A n a l y s i s A l t e r n a t i v e s & E v a l u a t i o n I m p l e m e n t a t i o n F i n a n c i a l s R i s k s & M i t i g a t i o n 18
Apply as Business Development manager to get high decision power T U K V i s i o n C o n s u l t i n g Career-shift Close to family Gain money New challenges High Decision Weighting 20 % 5 % 15 % 20 % 40 % HR Director Dallas Field Sales Representative Business Development Manger, LA Territory Operations Leader 9/22/2024 A n a l y s i s A l t e r n a t i v e s & E v a l u a t i o n I m p l e m e n t a t i o n F i n a n c i a l s R i s k s & M i t i g a t i o n 19
Coming back to our key recommendation: T U K V i s i o n C o n s u l t i n g Apply for the job as a Business Development Managerin Los Angeles to influence the company by actively engaging in the current expansion in the U.S. with the existing franchising model by adding new revenue streams to turn for profitability and by striving for new visions like expanding to Europe. 9/22/2024 A n a l y s i s A l t e r n a t i v e s & E v a l u a t i o n I m p l e m e n t a t i o n F i n a n c i a l s R i s k s & M i t i g a t i o n 20
The Franchising Model provides a great strategic fit within the US market. T U K V i s i o n C o n s u l t i n g OYO Franchising 24 years Wants to travel the world and experiences different cultures Does not have that much money Interested in Technology 34 years American dream Owns a privately operated hotel Struggles to attract customers Julia Steve Values comfort while traveling and safety Wants to book hotel rooms that are not to expensive Wants to support his family Needs a trustworthy partner for the future Driven by entrepreneurial spirit Julia s Needs: Steve s Needs: 9/22/2024 A n a l y s i s A l t e r n a t i v e s & E v a l u a t i o n I m p l e m e n t a t i o n F i n a n c i a l s R i s k s & M i t i g a t i o n 22
Why should you apply as a Business Development Manager (BDM)? T U K V i s i o n C o n s u l t i n g Once in a lifetime opportunity Chance to work with great minds Work in an unicorn startup Influence OYO and the industry in a massive way Small rumors about the CEO Unclear future of OYO Not profitable yet Use the given opportunities as a BDM and guide OYO to a bright future! 9/22/2024 A n a l y s i s A l t e r n a t i v e s & E v a l u a t i o n I m p l e m e n t a t i o n F i n a n c i a l s R i s k s & M i t i g a t i o n 23
You should affect OYOs development by tackling new chances. T U K V i s i o n C o n s u l t i n g If you are thinking anyway, think big! Influence US-strategy Create customer demand Foster co-creation Service and ease of use are key nowadays Implement DPBER customer journey DPBER Dreaming Planning Booking Experiencing Reflecting 9/22/2024 A n a l y s i s A l t e r n a t i v e s & E v a l u a t i o n I m p l e m e n t a t i o n F i n a n c i a l s R i s k s & M i t i g a t i o n 24
You should affect OYOs development by tackling new chances. T U K V i s i o n C o n s u l t i n g If you are thinking anyway, think big! Add new revenue streams Services (ease of use) Bundle pricing (transportation) Experiences (i.e meet and greet) 9/22/2024 A n a l y s i s A l t e r n a t i v e s & E v a l u a t i o n I m p l e m e n t a t i o n F i n a n c i a l s R i s k s & M i t i g a t i o n 25
You should affect OYOs development by tackling new chances. T U K V i s i o n C o n s u l t i n g If you are thinking anyway, think big! Aim for ambitious goals in the near future Changing tourism landscape all over the world Lay the foundation for an expansion to EU Avoid an IPO 9/22/2024 A n a l y s i s A l t e r n a t i v e s & E v a l u a t i o n I m p l e m e n t a t i o n F i n a n c i a l s R i s k s & M i t i g a t i o n 26
You should affect OYOs development by tackling new chances. T U K V i s i o n C o n s u l t i n g If you are thinking anyway, think big! Influence US-strategy Create customer demand Foster co-creation Service and ease of use are key nowadays Implement DPBER customer journey Add new revenue streams Services Bundle pricing Experiences Aim for ambitious goals in the near future Changing tourism landscape all over the world Lay the foundation for an expansion to EU Avoid an IPO Become a major player all over the world Because of your mindset. 9/22/2024 A n a l y s i s A l t e r n a t i v e s & E v a l u a t i o n I m p l e m e n t a t i o n F i n a n c i a l s R i s k s & M i t i g a t i o n 27
Michel, follow this Roadmap for an awesome and bright Future! T U K V i s i o n C o n s u l t i n g 2019 2020 2021 2022 2023 2024 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 Short term Get the job! Further expansion in the U.S. Mid term Add new revenue streams Improve customer journey Long Lead the possible EU expansion 9/22/2024 A n a l y s i s A l t e r n a t i v e s & E v a l u a t i o n I m p l e m e n t a t i o n F i n a n c i a l s R i s k s & M i t i g a t i o n 28
How OYO creates value in the future T U K V i s i o n C o n s u l t i n g Key Activities Customer Relationship Franchise Model Enabling people to sleep in a clean bed and save environment Target group: Millennials Value Proposition at low costs while experiencing the world Key Partner Customers But having a bed for every traveller Key Resources Channels Cost Structure Revenue Streams 9/22/2024 A n a l y s i s A l t e r n a t i v e s & E v a l u a t i o n I m p l e m e n t a t i o n F i n a n c i a l s R i s k s & M i t i g a t i o n 29
Our Vision Yoursand OYOs Mission Be one of the creative heads at OYO business development and help OYO to be the number 1 in bringing quality living space to billion plus people!
Implementation Costs T U K V i s i o n C o n s u l t i n g 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 Marketing Advertisment 5 10 3 2 2 2 3 5 7 8 Co-branding 7 7 7 7 7 7 7 7 7 7 in total 12 17 10 9 9 9 10 12 14 15 Innovation 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 Tech. offerings R&D in total 5 2 7 5 2 7 3 2 5 2 5 7 4 2 6 5 2 7 4 2 6 2 5 7 7 2 9 1 2 3 physical expansion Hotel and room upgrading 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 25 30 40 50 15 15 20 20 10 15 9/22/2024 A n a l y s i s A l t e r n a t i v e s & E v a l u a t i o n I m p l e m e n t a t i o n F i n a n c i a l s R i s k s & M i t i g a t i o n 32
Implementation Costs T U K V i s i o n C o n s u l t i n g Marketing 12 17 10 9 9 9 10 12 14 15 Innovation 7 7 5 7 6 7 6 7 9 3 Expansion 25 30 40 50 15 15 20 20 10 15 Fund: - with fund for expansion to USA 300 million - Internal fund 132 million Investment of 432 million USD 9/22/2024 A n a l y s i s A l t e r n a t i v e s & E v a l u a t i o n I m p l e m e n t a t i o n F i n a n c i a l s R i s k s & M i t i g a t i o n 33
Topline growths due to our aggressive plan T U K V i s i o n C o n s u l t i n g Revenue in USD 1200.00 1000.00 871.6 800.00 622.6 600.00 444.7 CAGR: 80 % 1.7 5.9 20.672.0108.0162.1226.9317.7 400.00 200.00 0.00 Worst Normal Best Break-Even in 2023 9/22/2024 A n a l y s i s A l t e r n a t i v e s & E v a l u a t i o n I m p l e m e n t a t i o n F i n a n c i a l s R i s k s & M i t i g a t i o n 34
Future actions will be measured by the following key performance indicators. T U K V i s i o n C o n s u l t i n g KPIs Target (2028) 1 Customer Satisfaction 98%+ 2 eWoM-Rating 4,7/5 3 Hotels U.S. 866 4 Occupancy level 92%+ 5 Daily visitors (website) 1.2mil. 9/22/2024 A n a l y s i s A l t e r n a t i v e s & E v a l u a t i o n I m p l e m e n t a t i o n F i n a n c i a l s R i s k s & M i t i g a t i o n 35
Risks & Mitigation
Risks & Mitigation T U K V i s i o n C o n s u l t i n g I. Competitors imitation Loyalty programs and increased switching cost major III II Probability II. Further cost challenges Research and investigation of source I minor III. Increased number of rivals Using business knowledge and market strength high low Impact 9/22/2024 A n a l y s i s A l t e r n a t i v e s & E v a l u a t i o n I m p l e m e n t a t i o n F i n a n c i a l s R i s k s & M i t i g a t i o n 37
Our Vision Yoursand OYOs Mission Be one of the creative heads at OYO business development and help OYO to be the number 1 in bringing quality living space to billion plus people!
Thank your for your attention T U K We are looking forward to V i s i o n C o n s u l t i n g further discuss the topic! TUK Vision Consulting Create Visions for Future Success. Anne | Caroline | Jim | Marcel Technische Universitaet Kaiserslautern
