OYO Hotels USA Strategy Analysis and Milestones
OYO Hotels in the USA, through FIA Consulting, presents a comprehensive analysis of their strategy, challenges, sustainability, and milestones. The company's innovative approach to reselling rooms under its own app and pricing algorithm, along with its expansion into various countries catering to budget travelers, showcases its commitment and adaptability in the hospitality industry. With a solid background and experience in the USA market, OYO's strategic decisions, including a significant investment to enter the US market, reflect its determination for growth and success. Understanding their end-customers, primarily millennials with a focus on experience and technology, OYO emphasizes convenience and transparency. Supported by prominent investors, OYO occupies a unique position in the competitive hospitality landscape.
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Presentation Transcript
OYO OYOHotels USA FIA CONSULTING PRESENTING TO MS. JAKAYLA MICHEL AMANDA, HARUKA, MAURICIO AND RODRIGO To MICHEL
AGENDA QUESTIONS RECOMMENDATION ANALYSIS STRATEGY IMPLEMENTATION FINANCE CONCLUSION
Let us answer your concern.. oShould you apply for the job? oDoes OYO s strategy make sense? oWhat challenges OYO face in USA? oIs OYO business sustainable?
Milestone Resold the room under own APP and pricing algorithm (Technology) 2019: Japan and US 2018: UK 2017: Expansion in Asia 2013: India
Milestone Countries for budget travelers (Malaysia, Nepal, China, Indonesia, UAE) Different culture + religion 2019: Japan and US 2018: UK 2017: Expansion in Asia Resold the room under own APP and pricing algorithm (Technology) 2013: India Investors: Softbank, Sequoia capital, Lightspeed, greenoaks, Grab, Didi,
Milestone New challenge! Out of comfort zone Countries for budget travelers (Malaysia, Nepal, China, Indonesia, UAE) Different culture + religion 2019: Japan and US 2018: UK 2017: Expansion in Asia Resold the room under own APP and pricing algorithm (Technology) 2013: India Investors: Softbank, Sequoia capital, Lightspeed, greenoaks, Grab, Didi,
Milestone New challenge! Out of comfort zone Countries for budget travelers (Malaysia, Nepal, China, Indonesia, UAE) Different culture + religion 2019: Japan and US Solid experience and background for USA market! 2018: UK 2017: Expansion in Asia $300 million to enter USA A must country to be visit! Resold the room under own APP and pricing algorithm (Technology) 2013: India Investors: Softbank, Sequoia capital, Lightspeed, greenoaks, Grab, Didi,
Who are end-customers? 1. Millennials 2. Price Sensitivity 3. Love travelling, Love experience, Love technology 4. Not so much into spending money on gods and products 5. Convenience and Transparency
Why franchise models? Transparency for hotel owners (est.revenue, gross operation profits) Speed up the time taken to sign agreement with new hotel partners Evaluate capital expenditure + location Better manage hotel inventory
RECOMMENDATION Accept the challenge: BE Part of OYO as a Business Development manager to expand hotels in USA
VALUES AND CRITERIA 1. Millennials 2. Price Sensitivity 3. Love travelling, Love experience, Love technology 4. Not so much into spending money on gods and products 5. Convenience and Transparency Customer Experience, Hotel Experience
Challenges in USA Strong Brands 71% of market share Well Organized Chains
Competitors Price Strong US brands: Days Inn, Hilton, Holyday inn OYO Small Hotels Occupation rate Hotel experience
Opportunities in USA Target market Increase of Millennials High tech culture
Alternatives Do not accept Accept Future prospections: Start up, growth Leaning: Go beyond finance, learn other business Comfortable: New company Career opportunity: Make difference for the company Make difference for US
WHAT IS OYOS OYO S FUTURE?
WHAT IS OYOS FUTURE? 3 Years Strategy Landscape Our recommendation investing in a career change as a Business Development Manager
WHAT IS OYOS FUTURE? Year 1 Plenty of opportunities for the US Market 2000 New Rooms in US for Y1 Today OYO launched only OYO Classic Occupation rate from 25-65% to 90% Opportunities of Implementation: OYO Townhouse / OYO Home / Collection O / Capital O and OYO Life Going for the mid and high-end Hotels
WHAT IS OYOS FUTURE? Year 2 Consolidate and Launch the Products in the US Market Increment of 4200 rooms in Y2 (110% Increase YoY) Opportunities in the Landscape: Canada Market Mexican Market South America Market
WHAT IS OYOS FUTURE? Year 3 OYO very well established in US 6800 Room in Y3 (62% YoY) New products with the latest technology available for US citizens and Tourists Solid Customer base The implementation in Canada, Mexico and South America should be ready Investments in Technology must continue to keep the leadership in the market - Leader Worldwide Company Goal
Will it be profitable? Revenue INR CR 9,338 6,501 3,634 2,144 1,481 416 120 Y-2 Y-1 0 1 2 3 4
Will it be profitable? Revenue INR CR 9,338 5x More Revenue 6,501 3,634 2,144 1,481 416 120 Y-2 Y-1 0 1 2 3 4
Will it be profitable? Net Margin % 10.00% 5.00% -0.40% 0.00% Y-2 Y-1 0 1 2 3 4 -4.00% -10.00% -9.40% -10.70% -20.00% -20.30% -30.00% -40.00% -44.50% -50.00%
Will it be profitable? Net Margin % 10.00% 5.00% -0.40% 0.00% Y-2 Y-1 0 1 2 3 4 -4.00% -10.00% -9.40% -10.70% -20.00% -20.30% -30.00% -40.00% -44.50% -50.00%
CONCLUSION BE THE STAR OF OYO: Business Development manager to expand hotels in USA
