The document provides information about online budget hotels in India. It discusses the history of hotel development in India dating back to 1903. It also categorizes hotels into heritage, luxury, budget, and resorts. Key points noted are the current and projected supply and demand for hotel rooms in India. The document reviews rating systems for hotels and provides details about challenges faced by budget hotels. It analyzes major players in the online budget hotel market like Oyo Rooms and Treebo Hotels, comparing their business models, investments, and strategies. SWOT analyses are given for Oyo and Treebo. Consumer preferences and future projections for online hotel bookings in India are also summarized.

1. Online Budget Hotels
By
1.Y.Satya Surya Teja
2.G.Siva karthik
3.Tejeswini.S
4.M Anil Kumar

2. Hotel Development in India
 In 1903, JRD TATA started Indian Hotels Company Ltd and the first Hotel in
International standards was constructed the Taj Mahal Hotel in Mumbai
 Oberoi Hotel Pvt.Ltd in 1946. Later on 26th May, 1949, established East India
Hotel Ltd(EIHL) at Calcutta.
 Welcome Group is the division of ITC Ltd started in 1975 with their first hotel chola
Sheraton Madras.
 In 1964 three corporations were set up by Government of India,
India Tourism & Hotel Corporation
India Tourism Corporation Ltd, and
India Tourism & Transport Corporation
 In 1966, these three corporations were merged and formed “India Tourism and
Development Corporation of India” (ITDC).

3. Categorization of hotels in India
Heritage hotels
Luxury hotels
Budget hotels
Resorts
Source: HA-India

4. Key points in Indian hotel industry
Supply India has an estimated 1,70,000 hotel rooms. Even with the
expected addition of another 60,000 hotel rooms (across
segments) over the next 3-5 years, the industry is expected to
fall short of meeting the long term demands of an economy
growing at 7-9% p.a. Also, as per Cygnus estimates, around 40
international brands are said to enter the country in the next
five years.
Demand Largely depends on business travelers but tourist traffic is also
on the rise. Also, there is seen an increasing demand for
medical tourism. Demand normally spurts in the peak season
between November and March.
Source: Equity Master
report

5. Rating of the hotels
 In simple meaning, hotel rating is used to categorize hotels according to their
quality of services
 Basically star rating is given on basis of food service, entertainment, View, room
variation and other luxury amenities
 It’s is fact that each organization has its own methods and kind of services like in
foreign countries
 The rating is given by HARCC ( Hotel & Restaurant Approval Classification
Committee)

6. One Star
• Typically hotels which are based on small budget and
restaurants which are near to public place and serve primary
facilities in a reasonable price
Two Star
• Typically hotels which are providing more than primary
facilities like in rooms have Tv, Phone for customer flexibilities
Three Star
• Hotels which fulfill the services like Reception Service, Internet
access, heater, Hair-Dryer, Iron Services, laundry Services

7. Four Star
• By observing the kind of services such as beautifully
furnished rooms, restaurants, Doorman Service, Spacious
reception hall, fitness center and many service provider
Five Star
• Properties that typify luxury across all areas of operation.
Guests will enjoy an extensive range of facilities and
comprehensive or highly personalized services. Properties at
this level will display excellent design quality and attention
to detail.

8. Online Budget Hotels

9. Challenges in Budget Hotels
Travelers are all too familiar with nightmarish
encounters in standalone hotels in India. Contrary
to promises, guests arrive to ramshackle buildings,
missing signage, leaky washrooms, torn mattresses,
unclean floors, sputtering air-conditioning, non-
acceptance of credit cards and so on.

10. Players in the Market

11. Online Budget hotels – SWOT Analysis

12. Strengths
Provide a variety of hotels covering mid market to
upscale market
Financial transaction through electronic fund transfer
is fast
Can be started with very low investment
More affordable advertising

13. Weaknesses
 Reluctance in customers to use internet for financial transactions like
booking tickets online
 No direct customer-seller interaction due to this sometimes fraud data
can place in websites

14. Opportunities
 Increasing demand for budget hotels in India due to frequent
travels of officials
 Utilization of internet to exploit their product , offer visibility,
presence, marketing and distribution
 Affordable hotels are an ideal option for a weekend stay
 Internet users rapidly increasing
 More are feeling comfortable buying through Internet
exclusively

15. Threats
 High competition can increase the wages of staff
 Online budget hotels are forced to give all the facilities with low
prices
 Hospitality experience cannot match to the existent market leaders
 Dishonest online businesses damage consumers’ confidence and
faith in the entire enterprise of Internet marketing

16. Business Models
Agency model
 It is a traditional travel agent model
 The guest books through website (the
travel agent) and you simply pass on
the guests' information to the hotels
 The commission per booking is usually
negotiated in advance
 Ex: Make My Trip, Clear Trip etc.
Merchant Aggregator model
 The hotel gives the inventory to the
aggregator
 Percentage of revenue is negotiated in
advance
 aggregator acts as a merchant on behalf
of the hotel
 The aggregator charges the customer
upfront and remits the discounted cost
of the room to the hotel, keeping the
difference for themselves.
 Ex: OYO Rooms, Treebo

17. Consumer Preferences
Research Online & Book Online
Research Online & Book Offline
Research Offline & Book Offline
29%
34%
37%
63% research hotels online while 29% book online

18. Consumer Preferences
49% 32% 19%
Preferred Accommodation
Budget Economy Luxury
53% 50% 43% 43% 41%
Reasons for preferring Online Hotel
Booking
Source: Google Report

19. Requirement of Accommodation
Generally people require accommodation while they go
for a vacation
Top Reasons for vacation:-
20%
26%
32%
38%
46%
46%
Wedding/Social Gathering
Historical/Cultural
Relaxation
Vacation Reasons
57% prefer relaxation trip
36% prefer Luxury trip

20. Friends are most preferred travel
companions
37%
31%
24%
11%
10%
With Friends
With large Family
With Spouse & Kid
With Spouse
Alone
Spouse, Friends
Friends , spouse +
Kids
Friends, large
family

21. Future Forecasting
Half the Users are likely to book Hotels Online in future
49% 57%
Of Ron- Bof Users are likely to
book hotels online in future
Of Rof-Bof Users are likely to
book hotels online in future

22. Future Forecasting
 Users who book hotels online will grow 2.4x from 3.5M in 2014 to 8.4M by the end of
2016
 Revenue from hotel booking will grow 1.2x from $0.8Billion in 2014 to $1.8B in 2016
 Expected market size by 2022 Forecasting is $ 418.9 B where present market size is $
147B
 By 2025, foreign tourist arrivals in India is expected to reach 15.3 million, according to
the world
Tourism Organization
 Capital investments for tourism and hospitality sector are expected to increase at a
CAGR of 8.6 per cent during 2009-25 period
 In 2015 total Investments are S40.5B.These Investments will go up to S125.9B
Source: Google Report

23. Funding Details
Deyor rooms Zo rooms Room on call Lemon tree hotels My new deals
$500M $5M
$31M
$300M $34M $200M
Series A
Series B
Angel Funding Seed
Dheeraj Jain(co
founder)
Tiger global, Orois venture
partner and Sol primero
Payal Syal APG
--
Oyo rooms Treebo rooms
$650M- Seed
$25M- Series B
$100M- Series C
$6M- Series A
SoftBank, Greenoaks Capital, Lightspeed
ventures capital, venture nursery, DSG
consumer partners, Sequoia Capital
Matrix Partners, SAIF Partners
Source:Tracxn

24. OYO Rooms
 OYO means “On Your Own”
 OYO Rooms India’s fastest growing branded network
of budget hotels founded by Mr.Ritesh Agarwal in
2013.
 OYO Rooms currently operates in more than 125
Indian cities.
 OYO Rooms provides standardized hotel rooms with
features such as air conditioner,TV,complimentary
breakfast and Wi-Fi with 24*7 customer service
support.
 In 2013-2014 FY the revenue is $76162.93
 In 2014-2015 FY the revenue is 2.4 Crore rupees
 The value of company is $1.2B

25. Oyo Rooms Strategy
 Oyo Rooms is following “Blue Ocean” strategy
 It expands the boundaries of an existing industry
 Hotels don’t pay money for registering in Oyo Rooms
 Oyo Rooms takes share in revenue generated in each month
Oyo Rooms takes 10%-15% in monthly revenue of a hotel based on how
many are booked by using Oyo technology services
 Oyo Rooms and Hotels have the agreement on that and the agreement
is valid for 3 months. With in one month Oyo Rooms and hotels can’t break
their agreement, after the first month they can break the agreement in
some conditions
Source:Akshita(HR)

26. Oyo Rooms Hierarchy
CEO
COO
Operations
team
CGO
Analytics team
CBDO
Sales team
CFO
Finance and
Auditing team
VP-Product
Management
Technical team
VP-
Engineering&Chief
culture
Ambassador
HR and
marketing team
Source:Akshita(HR)

27. Strengths
1.Excellent use of
Advertising for High
Brand Recall
2.User-Friendly/Easy-
to-use Interface
3.Constant Innovation
Weaknesses
1.Fast Expansion leading
to compromise on quality
2.Renovation of Run-
Down Hotels Raises
questions of Trust &
Credibility
Opportunities
1.The no of Budget
Travelers in India on a
rise
2.More and More people
are technology-driven
3.Use of social media to
enhance customer
experience
Threat
Fewer repeat
customers
SWOT
Analysis –
OYO Rooms

28. Treebo Hotels
Tree is the best place for shelter and Treebo hotels is
following “Co-Branding” strategy i.e. by taking hotels for l
ease and changing into “Treebo” hotels and rooms
booking via online and offline, but mostly online
 Treebo Hotels mainly depends on digital Marketing
 58% of the sales are Corporate Sales
 Every Treebo hotels has one “Quality Manager", who is
recruited by Treebo team
 This person takes care of that hotel
 Treebo hotels has tie-ups with online travel agencies like
Cleartrip,yatra.com etc.
 Treebo takes 30-40% of the monthly revenue based on
occupancy
Source:Rajan-HR&Associate Director

29. Stages in Treebo Hotels
Transformation
Business
Developmen
t team
Quality
Analysis
Team
Transform
ation team
Reservatio
n team
Revenue
team
Customer
Experience
team
Treebo
Hotel

30. Strengths
1.Strong Brand Power
2.High control over
the quality
implementation
3.Can book rooms in
offline/online
Weaknesses
1.Slow growth rate
2.Not available as
the mobile
application
Opportunities
1.Can expand in
more cities
2.Chance to become
market leader in
urban areas
Threat
Getting revenues is
difficult in semi
urban and rural
areas and it has risk
SWOT Analysis
–Treebo Hotels

31. Key differences b/w two business plans
Oyo Rooms
 Less risk for the
company
 Tracking each hotel is
difficult
 Making new deals is
easy for company
Treebo
 High risk for the
company
 Tracking each hotel is
easy
 Making new deal takes
more time compare to
the Oyo

32. Thank you