Analysis of Jakayla Michel's Future at OYO: Exploring Sustainability and Career Decisions

Jakayla Michel, an MBA student at Columbia University with a background in investment banking, contemplates applying for a job at OYO. The analysis delves into the sustainability of OYO's business model, examining key aspects such as market share, competition, value proposition, and resources. Consideration is given to market trends, customer preferences, and the potential for innovation. Through a structured evaluation, Jakayla aims to make an informed decision regarding her career path and OYO's future prospects.

• Analysis
• Sustainability
• Career Decisions
• OYO
• Market Trends

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1. The future of Jakayla Michel at OYO?

2. Introduction 2

3. Who am I? Work Experience & Education Personal Data 2018 now MBA at Columbia University, New York Classes in Banking, Finance and Operations Name Jakalya Michel 28th April, 1990 Born Adress Linken Road 19 42516 New Jersey 2014 - 2018 Junior Investment Banking TSH Bank Washington 2010-2014 Columbia University, New York Main Focus: Advanced Finance & Banking Additional classes: M&A and Innovation Management Clubs Case Club CU 3 Introduction Analysis Implementation Financials Alternatives Conclusion

4. Analysis 4

5. Right now, I am asking myself: Should I apply for a job at OYO? 5 Introduction Analysis Implementation Financials Alternatives Conclusion

6. Is the business model sustainable? Key Partners Competitors Value Proposition Key Resources Customers Cost Revenue 6 Introduction Analysis Implementation Financials Alternatives Conclusion

7. Is the business model sustainable? 71& of hotel market in the U.S. taken by branded hotels Tru by Hilton, Holiday Inn Express, Key Partners Value Proposition Key Resources Customers Cost Revenue 7 Introduction Analysis Implementation Financials Alternatives Conclusion

8. Is the business model sustainable? 71& of hotel market in the U.S. taken by branded hotels Tru by Hilton, Holiday Inn Express, Key Partners Value Proposition Millenials Money for experiences No money for goods and products Key Resources Cost Revenue 8 Introduction Analysis Implementation Financials Alternatives Conclusion

9. Is the business model sustainable? Ability to predict and improve returns on investment Dynamic pricing algorithms Customer service Transparency Low budget Digitalization Proprietary app Interior design 71& of hotel market in the U.S. taken by branded hotels Tru by Hilton, Holiday Inn Express, Key Partners Millenials Money for experiences No money for goods and products Key Resources Cost Revenue 9 Introduction Analysis Implementation Financials Alternatives Conclusion

10. Is the business model sustainable? Ability to predict and improve returns on investment Dynamic pricing algorithms Customer service Transparency Low budget Digitalization Proprietary app Interior design 71& of hotel market in the U.S. taken by branded hotels Tru by Hilton, Holiday Inn Express, Key Partners Millenials Money for experiences No money for goods and products Key Resources Significant cost savings due to technological differentiation Revenue 10 Introduction Analysis Implementation Financials Alternatives Conclusion

11. Is the business model sustainable? Ability to predict and improve returns on investment Dynamic pricing algorithms Customer service Transparency Low budget Digitalization Proprietary app Interior design 71& of hotel market in the U.S. taken by branded hotels Tru by Hilton, Holiday Inn Express, Key Partners Millenials Money for experiences No money for goods and products Key Resources Significant cost savings due to technological differentiation Rapid network expansion leading to increased revenues 11 Introduction Analysis Implementation Financials Alternatives Conclusion

12. Is the business model sustainable? Ability to predict and improve returns on investment Dynamic pricing algorithms Customer service Transparency Low budget Digitalization Proprietary app Interior design 71& of hotel market in the U.S. taken by branded hotels Tru by Hilton, Holiday Inn Express, Key Partners The business model is sustainable! Millenials Money for experiences No money for goods and products Key Resources Cost Significant cost savings due to technological differentiation Revenue Rapid network expansion leading to increased revenues 12 Introduction Analysis Implementation Financials Alternatives Conclusion

13. Did OYOs strategy make sense? Mission Bringing a clean bed and safe environment to all travelers at a budget price. Strategy Paying the partner for the use of an existing asset Optimizing the technology and marketing expertise Standardization Transparency Becoming a franchisor of local hotel owners Rising brand power & expertise of marketing and technology Full control of hotel experience and pricing Overcoming inherent conflicts with hotel owners 13 Introduction Analysis Implementation Financials Alternatives Conclusion

14. Did OYOs strategy make sense? Mission Bringing a clean bed and safe environment to all travelers at a budget price. Strategy Paying the partner for the use of an existing asset Optimizing the technology and marketing expertise Standardization Transparency The strategy makes sense! Becoming a franchisor of local hotel owners Rising brand power & expertise of marketing and technology Full control of hotel experience and pricing Overcoming inherent conflicts with hotel owners 14 Introduction Analysis Implementation Financials Alternatives Conclusion

15. What challenges did it face, and how could it overcome them? Apply to small hotel owners who are not being served by the lower tier hotel franchise brands Taking advantage of the USP: Chic-design hotels for everyone Competition No full control of hotel experience Transformation to franchise model Artificial intelligence and machine learning Dynamic regarding to marketing Pricing algorithm 15 Introduction Analysis Implementation Financials Alternatives Conclusion

16. What challenges did it face, and how could it overcome them? Apply to small hotel owners who are not being served by the lower tier hotel franchise brands Taking advantage of the USP: Chic-design hotels for everyone Competition OYO managed to overcome its challenges! No full control of hotel experience Transformation to franchise model Artificial intelligence and machine learning Dynamic regarding to marketing Pricing algorithm 16 Introduction Analysis Implementation Financials Alternatives Conclusion

17. Implementation 17

18. Would the business model translate to the American market? What? Transfer business model to US market Why? How? Value prep is technology driven (app and pricing algorithm) Has been proven in other countries Use technology as well for US market Adapt to local needs and hotel standards Impact Transfer of technology Economies of scales 18 Introduction Analysis Implementation Financials Alternatives Conclusion

19. Would the business model translate to the American market? What? Growth strategy for US market Why? How? Organic growth: + 5 Hotels a day (18k in total) Marketing and education through website and field sales Inorganic growth: M&A of Hotels (e.g. Hooters in Las vegas) However, no focus Levers to profitability are room prizes and number of rooms Prices are managed by pricing algorithm Therefore number of rooms needs to increase Impact Number of rooms Economies of scales 19 Introduction Analysis Implementation Financials Alternatives Conclusion

20. Would the business model translate to the American market? What? Growth strategy for US market Top quality: property makeover Double your business Hassle-free operations Complete transparency with reviews Financial support 20 Introduction Introduction Analysis Analysis Implementation Implementation Financials Financials Alternatives Alternatives Conclusion Conclusion

21. Would the business model translate to the American market? What? Marketing strategy targeting millennials Why? How? Through social media (e.g. Instagram, Facebook, Pinterest) Affiliate marketing Get rid of false claims and increase transparency (e.g. free Wifi) Target group for OYO are millennials Impact Occupancy Revenue per average room 21 Introduction Analysis Implementation Financials Alternatives Conclusion

22. Would the business model translate to the American market? What? Marketing strategy targeting millennials (personas) Ben (29) Worked three years as marketing manager Annual salary: 50k USD Loves nature photography and travels a lot to different national parks all over US Posts is photographs mainly on Instagram Wants to have full transparency on booking and hotel quality Simon (32) and Anne (30) Self-employed couple Earning money with social media cooperations Do city trips once a month Spend money rather on healthy food and tra Wants to have full transparency on booking and hotel quality 22 Introduction Analysis Implementation Financials Alternatives Conclusion

23. What were its prospects for the future? What? Expansion and exploring IPO potential Why? How? In order to grow rapidly OYO needs additional funding Rapid expansion to other countries globally IPO: hire consultancy for exploring IPO decision Impact Capital Expansion speed Revenue 23 Introduction Analysis Implementation Financials Alternatives Conclusion

24. Timeline 2020 2021 2022 2023 2024 Impact Identify local market needs Occupancy 2 k 8 k 18 k Growth acceleration Economies of scale Marketing campaign Awareness Further expansion globally Scaling 24 Introduction Analysis Implementation Financials Alternatives Conclusion

25. Financials 25

26. The business model is sustainable Average occupancy by 2024 60% Required total investment by 2024 1,2B$ Average franchise rate by 2024 14% Cost-Revenue ratio 60% Average revenue per room per night by 2024 75$ Revenue in the US market by 2024 5,5B$ # of franchise hotels in the US by 2024 12,000 Break-even in 2022 26 Introduction Analysis Implementation Financials Alternatives Conclusion

27. Rapid expansion increases revenue In $ FCF in $ 6,000,000,000 1,600,000,000 1,400,000,000 5,000,000,000 1,200,000,000 4,000,000,000 1,000,000,000 800,000,000 3,000,000,000 600,000,000 2,000,000,000 400,000,000 1,000,000,000 200,000,000 0 0 2020 2021 2022 2023 2024 2020 2021 2022 2023 2024 -200,000,000 Revenue Opex Capex 27 Introduction Analysis Implementation Financials Alternatives Conclusion

28. Risks and Mitigations Impact Loss of renovations funding by VC partners I IPO II I II Algorithm and technology Principal agent problem Probability 28 Introduction Analysis Implementation Financials Alternatives Conclusion

29. Alternatives & Recommendation 29

30. Alternatives Searching for a new job Going back to TSH Appling at OYO Salary Personal Fit Information Long-term career perspective 30 Introduction Analysis Implementation Financials Alternatives Conclusion

31. Alternatives Searching for a new job Going back to TSH Appling at OYO Salary Personal Fit Information Long-term career perspective 31 Introduction Analysis Implementation Financials Alternatives Conclusion

32. Recommendation Apply for a job at OYO! But what job do you think will fit the most? 32 Introduction Analysis Implementation Financials Alternatives Conclusion

33. Conclusion 33

34. Which job should I apply for? HR Director, Dallas Main tasks Lead across various functions, development of key strategies Salary $100.000 - $150.000 p.a. Pros High importance for corporate success Cons No HR experience, therefore small chances to get the job Field Sales Representative Main tasks Identification of new business opportunities and partners Salary Unknown Pros Really challenging (5 new hotels every day) Cons Only working on the macro level 34 Introduction Analysis Implementation Financials Alternatives Conclusion

35. Which job should I apply for? Business Development, LA Main tasks Territory Operations Leader Main tasks Monitoring KPIs and derive improvements Salary Development of new sales channels Salary Unknown Pros $90.000 - $125.000 p.a. Pros Intermingle of data driven analysis and being in touch with people Cons High variation of tasks Cons Cold calls and direct sales Non identified 35 Introduction Analysis Implementation Financials Alternatives Conclusion

36. Which job should I apply for? Business Development, LA Main tasks Territory Operations Leader Main tasks Monitoring KPIs and derive improvements Salary Development of new sales channels Salary Unknown Pros $90.000 - $125.000 p.a. Pros Non identified Cons Cold calls and direct sales Cons Intermingle of data driven analysis and being in touch with people High variation of tasks 36 Introduction Analysis Implementation Financials Alternatives Conclusion

37. Territory Operations Leader is the Job that fits best to me Business Development Manager Field Sales Representative Territory HR Director Operations Leader Tasks Salary Personal Fit 37 Introduction Analysis Implementation Financials Alternatives Conclusion

38. The future of Jakayla Michel at OYO! Apply for being a Territory Operations Leader at OYO! Challenging tasks Personal fit Financial security New experience 38 Introduction Analysis Implementation Financials Alternatives Conclusion

39. Thank you for your attention 39

40. Appendix 40

41. The business model is sustainable Business plan overview US-market in 2020 2021 2022 2023 2024 # Hotels 1000 2000 4000 8000 12000 Average number of rooms per hotel 150 150 175 175 200 Total number of rooms available 150,000 300,000 700,000 1,400,000 2,400,000 Average occupancy rate 30% 45% 52% 56% 60% Annual stayed room nights 16,200,000 48,600,000 131,040,000 282,240,000 518,400,000 Average revenue per available room 60 65 70 70 75 Average franchise rate 10% 11% 12% 13% 14.00% 41

42. The business model is sustainable 2020 2021 2022 2023 2024 Revenue 97,200,000 347,490,000 1,100,736,000 2,568,384,000 5,443,200,000 Opex 77,760,000 277,992,000 880,588,800 1,797,868,800 3,265,920,000 Capex 100,000,000 100,000,000 200,000,000 400,000,000 800,000,000 FCF -80,560,000 -30,502,000 20,147,200 370,515,200 1,377,280,000 42