OYO Rooms is an Indian startup valued at $9 billion that provides affordable hotel accommodation. It raised $54 crore in funding in January 2021 but saw its valuation drop from $10 billion to $8 billion in 2019-2020. In March 2021, OYO laid off 150 employees from a subsidiary. The company claims to have $1 billion in cash reserves. Scenario planning identified uncertainties around increasing hotel operating costs and regulations. Risks for OYO include litigation costs, lack of luxury options, and social media scrutiny. It faces competition from other hotel aggregators and direct competitors. OYO aims to expand globally and implement more tech innovations by 2030.

1. Management of Growth Ventures (EP60006)
Term Project
Arusarka Bose 18EC30049
Aviral Jain 18AG10004
Debjoy Saha 18EC30010
Febin Mathew 18EC30012
Tanay Raghavendra 18EC10063
Group Details
Team

2. Financial Status
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3. $
8B
INR
54Cr
$
9B
$
1B
Crash in 2019-2020
The valuation of the startup had also
crashed from $10 billion to $8 billion in
2019-2020. .
January 2021 Funding
OYO raised INR 54 Cr from Hindustan
Media Ventures Ltd raising its valuation
to the $9 Bn mark as a result.
Cost Restructuring in March 2021
OYO offloaded 150 employees from its
ancillary unit finance shared services to
research and consultancy firm KPMG.
1 Billion in Cash
Earlier this year, OYO had claimed that it
had $1 Bn in cash and cash-equivalent to
navigate the post-pandemic market.
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Financials

4. Scenario Planning
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5. Trends in
Hospitality
Industry
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Heightened Importance of
luxury
Impact of Social Media and
technology
Hands on hotel owners
Government Regulations
and importance of Hygiene
and Sustainability

6. Uncertainties
for Oyo Rooms
□ Will Hotels move away from Oyo’s
business models?
□ Will Oyo’s Operating Cost increase?
□ Will budget rooms lose importance?
□ Will social media impact Oyo’s PR
negatively?
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7. Final Scenarios
Travellers Want
Luxuries
□ Traditional travel
destinations lose
their sheen.
□ Travellers want to
utilise the in hotel
luxuries and stay in.
□ Less and less
travellers see budget
rooms as an
advantage for travel
plans.
Hotels start fully
rebranding
themselves
□ Even smaller
businesses start using
AI features to optimise
operations. Need for
aggregate business to
provide these
solutions reduces.
□ Online bookings
becomes a virtual
reality experience.
Regulations become
tighter and Social Media
gains impact
□ More and more regulations
on security and
environmental
sustainability start coming
in.
□ Operating Cost of the
hospitality industry
increases.
□ More and more people use
social media to form
opinions.
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8. Major Risks for Oyo Rooms
Litigation and Regulation Costs
Scarcity of Luxury Options
Scrutiny on Social Media
Disenfranchised Hotel Chains
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9. Competitive Landscape
and Porter’s Five Forces
Analysis
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10. Competitive
Landscape
With Oyo rooms, it’s not an
easy road to become the
market leader. It faces
competition from several big
players in the market, some
veteran players and some from
other industries who are eating
out its market share indirectly
but quite vigorously. They can
be mainly classified as direct
and indirect competitors.
Direct Competitors
Directly providing room services, house stay,
apartments, villa and much more
accommodations to traveler at reasonable prices.
Indirect Competitors
These provide quick search, fast payments,
settlements and booking tour packages, air/ticket
and hotel booking services.
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11. Porter’s Five
Forces
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High entry barriers, due to
high capital cost and limited
supply of suitable locations.
High, because of large
number of competitors and
low switching costs.
High, due to perceived level
of product differentiation is
moderate and buyer’s
propensity to substitute is
high.
High power, due to
large number of
suppliers and low
differentiation.
Moderate, because
quality differences are
high and switching costs
are low.

12. Pestel Analysis
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13. PESTEL Analysis
PESTEL analysis is a tool used
by marketers to analyse the
macro environmental factors
that have an impact on an
organisation.
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14. PES
Political
Travel Restrictions,
varying economic
reforms of different
governments.
Economical
Tax Reforms, Currency
strength and
Economic cycling.
Social
Demographic trend
and attitude towards
health and security.
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15. TEL
Technological
Mobile Apps, Social
media, Reviews on
hotels, Travel Websites.
Environmental
Local Climate and
Natural Calamities.
Legal
Crime rates, Innkeeper
Laws and
Truth-in-menu Laws.
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16. Swot Analysis and Mile
Snow Topology
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17. SWOT
Analysis
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STRENGTHS
Wide-Range of Hotels
Technology-Enabled
Innovative Deals
Social media Presence
Youth Energy
WEAKNESSES
High Cash Burn Rate
Poor Service Quality
Tight Margins
Decreasing Faith
Security Concerns
Growing demand for
aggregators.
Budget accommodation
Premium Investors
OPPORTUNITIES
Pandemic Issue
Hotel owners malpractices
Standardization
Growing Competition
THREATS

18. SWOT
Matrix Strengths Weakness
Opportunities
S-O Strategies
● Roll out pandemic
supportive
innovations.
● Through key
offers, incentivize
OYO travel plans.
W-O Strategies
● Enforce regulatory
protocols to
maintain
consumer
satisfaction.
● Reward good
performance.
Threats
S-T Strategies
● Make smart
expansion and
globalisation
decisions.
● Make innovative
changes to cater
customers best in
a post-pandemic
scenario.
W-T Strategies
● Increase security,
customer welfare.
● Focus on “Quality
over Quantity”,
prioritizing
superior service in
existing hotels
before expansion.
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19. Analyzer
Strategy
Adapting
post-pandemic
Miles and Snow
Typology
Maintaining Current
Market and Current
Customer Satisfaction:
1) Enforcing strict regulations to
maintain service quality.
2) Ensuring regular pay for all
employees and support to all
hotel partners, to ensure that
they stay motivated to provide
the best service.
Moderate Emphasis
on Innovation:
How hotel chains recover
from the pandemic slump
will be key to future growth
and expansion. OYO needs
to make some innovative
changes that make it the
better choice in the tourism
industry post-pandemic.
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20. Ansoff’s Growth Matrix
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21. Market Penetration
Markets
Products
Market Development
Product Development
Diversification
Existing Products
Existing
Markets
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Ansoff Growth Matrix
New Products
New
Markets
❏ Increase Production Capacity
❏ Increased Marketing Investment
❏ Enhanced Distribution
❏ Competitive Pricing
❏ Reduction in Operational Costs
❏ Launch New and Specialized Hotel
Categories
❏ R&D to identify customer demand
❏ Partnerships with Tourism
Companies
❏ Research and Development to
identify existing market cultures
❏ Regional Expansion
accommodating cultural
differences
❏ Seasonal Prices Policy
❏ Introduction of Transport
Services
❏ Tourist and travel guides for
leisure travelers

22. Growth Strategy
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23. Growth
Strategy
OYO Townhouse
Friendly neighbourhood hotel offering
comfort, efficiency, convenience and
affordability to its millennial customers
who are looking for premium features at
budget prices.
OYO Life
OYO targets young office-goers and
millennial folks looking for affordable,
fully-managed rental homes called OYO
Life. It can be a sublet with a friend or
solely.
Collection O
The latest addition to OYO Rooms and
Hotel is Collection O that appeals
discerning business travellers looking for
premium features in their hotel
accommodation and don’t have money
concerns.
OYO Palette
The upscale hotel category and signature
suites under OYO Rooms and Homes are
called OYO Palette.
OYO Homes
Transferred? Relocated? OYO Homes is
India’s first Home Management System
completely managed by OYO for students
and professionals living alone.
OYO Vacation Homes
Having collaborated with German
Traum-Ferienwohnungen, DanCenter,
Danland and Belvilla, OYO is now the
world’s third-largest vacation home
brand.
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Horizontal Diversification
Related Products Diversification
and many more ....

24. Marketing Strategy
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25. Market
Segmentation
● Luxury Travellers - They have abundant budget
and prioritise quality over price. Least Frequent
traveller type.
● Backpackers - They have lesser budget but are
Frequent Travellers. Cost is very important.
● Business Executives - They are also frequent
travellers who want some threshold of luxury after
which they focus on price.
Oyo Rooms positions itself most for the last two
demographics.
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26. Positioning of Oyo Rooms
● Standardised budget hotel aggregator. Seen
as a value of money option.
● Not associated with luxury options at all.
● Generally associated as a brand for the
youth.
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27. Promotional And Marketing Strategy
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28. Flaws and Solutions
□ Major flaw of Oyo’s promotional strategy is
that it is associating an all age product
(hospitality) to just the youth.
□ This can be solved by starting campaigns
similar to the nature of zomato and swiggy.
Ads that are more relatable to the older
population.
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29. Mergers and
Acquisition
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30. Mergers & Acquisitions
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Novascotia Boutique Homes, AblePlus
Solutions Pvt. Ltd., Weddingz, DoneThing,
Innov8
Qianyu
Islands
MDI
@Leisure Group
Danamica

31. 2030 Vision
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32. 2030 Vision
Global Expansion
With increase in it’s hotel
lineup, OYO has the
potential to become the
number one hotel chain
service provider.
Tech-led Innovation
We expect OYO to tap into
new technologies like AI,
AR/VR to benefit and
provide new experiences
to its customers.
Evolved Marketing Strategy
It can change its positioning
strategy from youth-focused
to various other groups like
business focused individuals,
family friendly outlets, etc.
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33. Thank You !
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