Ritesh Agarwal is the young founder and CEO of OYO Rooms, which has become India's largest chain of budget hotels. He started the company in 2013 after discovering issues with finding affordable and good quality accommodation during his travels. OYO Rooms standardizes hotels to ensure quality, and has expanded rapidly to over 350 hotels across 20 cities in India. The company's mobile app has been downloaded over 160,000 times and facilitated over 20,000 bookings. While the hotel industry in India has been heavily impacted by COVID-19, with demand dropping to zero, OYO aims to continue expanding in India and internationally through further funding rounds.

1. casestudy:SuccessStoryofOYORoomsCEORiteshAgarwal
RNB GLOBAL UNIVERSITY
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dr. PallavGoswami ARHAMBOTHRA
course:Mba 3rd (sem)

2. HISTORY
Ritesh Agarwal is the young Founder & CEO of OYO Rooms – fastest growing Branded
network of hotels offline & online. With a current valuation of nearly 360Cr, OYO rooms does nothing out
of the box but provides travellers the coolest yet cheapest efficient, young, standardized rooms with no
add-ons attached to it!
He has travelled all over the country and during such travels, discovered the problem with budget hotels.
Ritesh went into the thinking mode and realized that, the biggest pain on the face of this
earth while travelling was to find a good, affordable & most importantly “available” hotel to stay in but
like always, most of us ended up staying in a crappy place with equally crappy staff, food, etc. which
killed the whole trip.
This also reminded of the time he used to face accommodation issues during his trips. There were times
when he was sold a crappy place for a huge amount and many-a-times he used find a nice place in a little
amount. This got him motivated again, to create an online yet social community to bring information
about all good places together on one platform.

3. OYO Rooms was nothing but an idea to create India’s largest chain of efficient, young, standardized
rooms with an intention to build the coolest chain of no add-on rooms which might not have Spa, Gym
etc like the star hotels but will live upto the basic standards & high expectations for prices like never
before.
And to make sure the hotels met their expectations; OYO Rooms reached out to prospective
hotels or a hotel owner could also reach out to them, and OYO’s team would visit the place, audit the
hotel to understand the changes that would be required to standardize the property as per OYO
standards, and shares the same with the hotels.
The company raised Rs. 4 Cr from Lightspeed Venture Partners (LSVP) and DSG Consumer
Partners, at a pre-money valuation (valuation of a company prior to investment or financing) of Rs 14 Cr.
The company was clocking gross bookings of more than Rs.1 Cr. per month.
OYO Rooms has gone on to become India’s first technology driven network of standardized
branded budget hotels and has also widely expanded its presence to 350+ hotels and more than 4000
rooms in 20 cities like Delhi, Gurgaon, Noida, Bangalore, Mumbai, Pune, Goa, Jaipur, Hyderabad, etc, and
also aims to expand further to 1000 hotels in 25 cities by 2015 end.

4. OYO Rooms mobile app has been downloaded more than 160,000 times and more than 20,000 bookings have been
made so far. The app ranks amongst the best-rated apps on Google Play Store and has also been listed as one of the
top three apps in the ‘Travel & Local’ category.
HOTEL INDUSTRY IN INDIA-INTRODUCTION
The hotel industry in India, partially organized and majorly unorganized caters to ~1.8 Billion domestic
travelers and 9-9.5 Million foreign travelers. About 55% of organized hotels in India belong to 3-star or
higher categories.
Tamil Nadu and Uttar Pradesh account for more than 35% of all domestic tourist visits in India.
Air traffic reform in India, initiated in 2005 with the rise of low cost carriers had a major role in driving
the hotel industry growth in India. As a result the tourism industry in India has been growing and has
vast potential for generating employment and earning foreign exchange.

5. COVID-19 IMPACT UPDATE ON HOTEL INDUSTRY IN INDIA
India has been under a prolonged lock-down for more than 7 weeks now. The trajectory of positive COVID-19
cases continues to grow along with recovery rate. And now more than ever, there is a growing consensus that
Economic activities will have to co-exist with the virus and any further lock down will cause irreparable damage to
all industries.
The biggest collateral damage of worldwide lock downs can now be clearly seen on travel and hospitality
industry and India is no exception to that.Hotel demand has rapidly dropped to virtually zero in a matter
of just weeks beginning Mid- March with no end in sight.
Even when the hotels do open for business the overall experience will be marred by strict social
distancing guidelines, frequent sanitization and constant paranoia in the mind of patrons.Leisure travel-a
booming segment is expected to take the biggest hit followed by business travel.
The impact will be rather higher on the unorganized hotels in India which outnumber the branded hotels
by a very big margin. We believe atleast 10-15% unorganized hotels could be shutdown permanently and
will not reopen when national lock down ends.
The hospitality sector got Industry status in 2012 now needs a significant package from the government
which is yet to announce the same for any industry. The hospitality sector got Industry status in 2012 now needs
a significant package from the government which is yet to announce the same for any industry.

6. MARKET SEGMENTATION
Hotel Industry in India- Market segmented by region, hotel type, traveler type, branded or organized
MARKET DYNAMICS
Among five most important hotel ownership models globally, Franchise and lease and license models
are now getting increasingly popular in India as compared to owned hotels category. Over the past five
years the 2-3 star hotel occupancy has grown at the highest(~7%) rate YOY. A large chunk of that cann be
attributed to the growth in organized hotel industry in India.
The operating margin for budget and mid-category hotels is between 18-25% in India, which can be even
lower considering heavy discounting by online hotel aggregators and thus the market will always need
high inventory and >60% occupancy rates.
The GST council`s rate cut on from 28% to 18% for upscale hotels, and from 18% to 12% for mid-scale is
expected to be a major growth driver for hotel industry in India in coming years. The GST revision had a
positive effect so far and in Jan-Nov 2019 period foreign tourist arrival in India grew by 3.2% amounting
to 9.7 Million travellers.

7. THE METEORIC RISE OF OYO
Most of the below 3-star hotel industry in India is catered by economical range of hotels i.e. which offer rooms at
$20(1,400 INR) / night or less. The premium segment i.e. >$100(7,000 INR) per night makes up for less than 5% of
total market. This is the reason OYO has been able to scale up its operations so rapidly in just 6 years of its
existence. But the story just doesn`t end there.
Oyo is reportedly planning to enter 4-star hospitality segment by acquiring ITC Hotels-managed Fortune Select
Metropolitan Jaipur from UAE based Emaar properties.
In October 2019, OYO announced that it was planning to raise $1.5 Billion in its upcoming funding round, to
expand its position in the US and Europe.

8. MARKET SIZE OF HOTEL INDUSTRY IN INDIA
The market size of hotel industry in India(including unorganized market) is estimated at $22 Billion in 2019, growing
at 8.6% till 2025. The share of organized sector is expected to increase from 32% in 2019 to 37% in 2025.The
demand is expected to outpace supply in coming years and therefore revenue growth will be much higher than
volume(bookings) growth.

9. 1. Identify the characteristics of new generation entrepreneurs.
The new generation entrepreneur must be :-
Creative
Passionate
Motivated
Optimistic
Future-oriented
Persuasive
Flexible
Decisive
Adventurous

10. 2. Analyze the opportunity for new vendors in the organized hotel industry in India.
The best news is that every community has a raft of attractions and landmarks worth visiting.
What hoteliers have to do is add a little flair to them, and people from all walks of life will journey miles
to partake in their beauty.
In principle, the hotel industry has an opportunity to enjoy a year-round influx of customers thanks to its
modern structure.
During peak season, hotels typically take in domestic and international tourism – and local tourists
during the off-season. And, this is the magical allure of the hotel industry.
The world is getting globalised, there are more booking and travelling options. Technology is providing a
hand in helping the hotel industry grow.
The Future of Hospitality and the Hotel industry is bright for sure.

11. 3. Identify the difference between old generation entrepreneurs approach and
approach of new
generation entrepreneurs.
Old generation
1. Lack of technological facility
2. Risk taking ability was low
3. Use of labour in factories so that there will be
employment.
4. Limited marketing of products
New generation
1. Surplus of technology day by day and proper
implementation if it.
2. Risk taking ability is more
3. Use of labour is less compared to olden days as
now all the work are done by machines.
4. No limit of marketing of products.

12. 4. Identify as an entrepreneur which market segment offers maximum revenue and
profitability
Opportunity
As an entrepreneur the market segment which offer maximum revenue and profitability opportunity is fishing and
poultry farming.
There is quite high initial cost but In return it will generate high revenue because there are more non-veg people
than veg and there will be always demand for meat product.
5. If you want to serve as Entrepreneur in this industry what would be the areas where you want to
enter in to.
If I want to serve as entrepreneur in this industry my area will be semi-rural because from that all kind of support I
can get at affordable price and then move to urban area.