Oyo builds tech arsenal to cope with expansion

Oravel Stays Pvt. Ltd, which has over 8,500 properties affiliated to it under the Oyo budget hotel brand, is revamping its technology capability to keep up with its domestic and international expansion plans.

Oyo undoubtedly faces a tough challenge for the larger hotel chains, say analysts.

“While Oyo has been attempting that (data analytics), they are not able to match the big hotel chains because, usually, the property owners are not willing to share customer data with Oyo,” said Sanchit Vir Gogia, chief analyst, founder and CEO of Greyhound Research. Calling Oyo “a disruptor when it started”, he is of the view that over time, the entire premise of Oyo has been “weakening”.

“If you look at the Starwoods and Hyatts of the world, they have been using a ton of technology to understand customers and serve better deals to them. This is something that Oyo has not been able to counter,” said Gogia. The large hotel chains, according to him, use customer data from multiple sources to know about their dining or stay experience and offer them standardized yet tailored experiences across properties. Also, he said, Oyo’s main customer base is budget travellers, who do not spend much on in-room dining and other services, which is where hotels make the most money.

Gogia also asserts that in terms of tech spend and usage, it is not just Oyo but Indian hotel chains in general that fare poorly compared to their multinational counterparts. “They typically spend 0.1-0.5% of their revenue on technology whereas the ideal situation would be 2 to 3%,” he said. However, he added that the annual technology spending in the hospitality segment in India is growing at a relatively fast pace of 30-35%. “Hotels are increasingly looking at emerging technologies such as AI and virtual reality,” he added.

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Analyst:

Sanchit Vir Gogia: Sanchit is the Chief Futurist, Founder & CEO of Greyhound Knowledge Group, a Global Strategy & Transformation Research, Advisory & Consulting Group. He also serves as Chief Analyst & CEO of Greyhound Research, a Global, Award-Winning, Independent Technology & Innovation Research, Advisory & Consulting firm. To read more about him, click here.


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