4/4/2020 All of Oyo's Brands Explained: New Skift Research – Skift

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Rooms, Hotels

All of Oyo’s Brands

Explained: New Skift
Research
Seth Borko and Danni Santana, Skift Research

- Oct 31, 2019 10:30 am

O
yo’s multi-brand strategy speaks to its ambition
to expand out of the budget category it started
Skift
in. For now most of these brands are
Take
concentrated in India, which serves as a test market for
Oyo. It will be interesting to watch how these regional
offerings fare and evolve to fit into foreign markets.
— Seth Borko

In our latest report, Skift Research takes a deep dive into one of the most exciting
and divisive companies in travel today, Oyo Hotels and Homes.

We collected and reviewed hundreds of documents from Oyo as well as property-

and room-level data for all of the publicly viewable listings on Oyorooms.com. As a
result, we believe that this report presents the most accurate, consistent, and
complete look into Oyo’s income statements and key performance indicators
available today.

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Below is an excerpt from our Skift Research Report. Get the full report here to stay
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ahead of this trend.

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The core promise Oyo makes to consumers as a hotel brand is quality and
affordable rooms. Its first product and the one it is best known for is Oyo Rooms,
sometimes called Oyo Hotels, its budget hotel offering. But as the company has
grown, it has expanded to pursue a multi-branded strategy.

ALL OF OYO’S BRANDS, EXPLAINED

This multi-brand strategy lets Oyo expand its addressable market beyond budget,
into, for example midscale offerings. It also puts Oyo in a position to deepen its
relationship with existing clients across different modes of travel such as when they
travel for business rather than for leisure.

Oyo has also expanded its portfolio to include apartments and vacation homes,
following a company mandate to grow beyond offering traditional
accommodations.

Below we explain all of Oyo’s brands with their respective global footprints, the
company’s official positioning, and our own Skift take. We also delve into how Oyo
signs up new hoteliers and what those property owners pay to be a part of Oyo’s
brand. We should note, given how fast Oyo can evolve, all of this is our
understanding of the brand as of October 2019.

Traditional Hospitality

OYO Hotels (Formerly OYO Rooms)

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Global Footprint: The core brand, available markets all of Oyo’s global markets. We
estimate 15,000-plus properties.
Oyo Take: “Oyo Hotels (earlier known as Oyo Rooms) offer super affordable stays at
the best locations while assuring quality and the amenities that matter.”
Skift Take: These are your basic Oyo hotel rooms, the ones that started it all.
Budget accommodations but that promise to offer much better Wi-Fi and
aesthetically pleasing design. While they may vary from country to country, a
number of the existing U.S. hotels in Oyo’s portfolio, as an example, were formerly
branded by Motel 6 and Howard Johnson.

OYO Townhouse

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Global Footprint: 150-plus locations in India, UK, and the U.S.

Oyo Take: “The neighborhood hotel, in the midscale segment targeted at
millennial travelers aspiring to premium economy accommodations.”
Skift Take: Townhouse is Oyo’s take on a lifestyle hotel, which has become very
popular with both legacy hotel operators and industry newcomers as a way to
attract younger travelers. The brand was handpicked, along with Oyo Hotels, as the
focal point of its $300 million U.S. expansion this summer.

Capital O

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Global Footprint: India, Southeast Asia, the Middle East, and Latin America. We
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estimate 800-plus properties.
Oyo Take: “The perfect offering for the new-age travelers with the functionalities
that they look for when it comes to business & leisure stays. These premium hotels
are located in prime locations and specially curated to deliver Oyo’s quality-assured
experience at an affordable price.”
Skift Take: Launched in June 2018, Capital O is a premium offering for business
travelers, launched as part of Oyo’s push to capture more corporate accounts. This
is by our count Oyo’s second largest brand as the company has made capturing
business travel a priority. It is also, after Oyo Hotels (Oyo Rooms), the brand with the
second most international locations, speaking to the global business travel
landscape.

SilverKey

Global Footprint: India. We estimate 150-plus properties at current, expanding as

part of plan to add 400 this year.
Oyo Take: “Launched in April 2018, SilverKey caters to the needs of the corporate
traveler undertaking business trips for a short or long duration. With SilverKey, we
are providing executive furnished accommodation to corporates for their
personnel stay. Located in the heart of business hubs and equipped with spacious
rooms, upscale interiors, meals, gym, and dining area to cater to all the
requirements of business travelers.”
Skift Take: Oyo’s executive stay product, SilverKey is for the modern corporate

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traveler that dreads going from one hotel to another. Instead, the goal is to make
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business travelers feel like they are at home and tap into emotions they may feel
when staying at a vacation home or Airbnb. In April of this year, Oyo announced
expansion plans for this brand to be in 19 cities by the end of 2019, up from the
current 10, and to add 400 properties and 8,000-plus rooms.

Palette Resorts

Global Footprint: India. We estimate 150-plus properties

Oyo Take: “Palette Resorts offers the perfectly curated staycation for those in search
of an intuitive experience at competitive prices, an upper-end leisure resorts
category.”
Skift Take: Another of Oyo’s newer brands, launched in August 2018, Palette
Resorts, is the company’s first foray into the upscale hotel category. The decision to
make this leap made sense for a brand that appears to be casting a wide net in
India to see what sticks before expanding globally. But the idea to go the resort
route was peculiar.

Collection O

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Global Footprint: India. We estimate 250-plus properties.

Oyo Take: “The newest category under Oyo’s hotel portfolio that caters to the
requirements of discerning business travelers. The category offers bigger and
spacious rooms with premium furnishing and linen, on-request laundry, unlimited
breakfast, 24X7 in-room dining, high-speed WiFi, workstations in every room and
Oyo-trained customer service. This brand is currently only available in India.”
Skift Take: Launched in March 2019, this mid-scale brand caters to corporate
travelers. Oyo says it is seeing strong traction with business accounts, racking up
stays from 300-plus corporate brands. That said, we struggle to see much of a
distinction in positioning between Collection O and Capital O. Oyo is
experimenting with the idea of launching this brand wider, with experiments in
Mexico and Indonesia.

Others
Travelers looking to book a stay with Oyo may notice brands, such as Flagship,
Premium, and Spot On, that Oyo does not recognize as core brands. They are
effectively slight variations on the Oyo Hotels core product either tweaked slightly
more upscale (Flagship, Premium) or more budget (Spot On).

Alternative Accommodations

Oyo has been aggressively expanding into alternative accommodations. it started

in late 2017 with the launch of its own short-term rental offering in India. But took
its biggest step in that direction with its May 2019 purchase of @Leisure Group for
$415 million. Tobias Wann, the former CEO of @Leisure group and now, the current
CEO of Oyo Vacation Homes, said his business was a good match for Oyo across
several fronts.
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First, in principle, Wann said both Oyo and @Leisure share an intense focus on
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controlling an exclusive supply of accommodation inventory. He tells us that, “the
one who owns the supply exclusively will be the one who will have a chance to
significantly increase the impact in the vacation home industry.”

But supply acquisition in the short-term rental market is painstaking work and
Wann, with Oyo’s backing, with has ambitious expansion plans. To grow the
business, Oyo has committed to hiring 1,000 new employees in Europe by 2020.
Many will go towards signing on new properties because Wann says that at the end
of the day he needs “feet on the street” to expand in this fragmented and localized
industry.

Secondly, Wann said that there are significant revenue synergies to be gained from
this merger, pointing to the boost he sees coming from applying Oyo’s revenue
management abilities to vacation rentals. He wants to be one of the first vacation
home manager to apply this technology at scale. Wann tells us that Oyo vacation
homes is taking, “the tactics, tools, behaviors that Oyo very successfully applies on
the hotel side… and applying them on the home side now as well.”

Furthering this initiative was the thinking behind Oyo’s follow-up purchase of
short-term rental revenue management software provider Danamica just last
month. Wann says that even after a few months, revenue management gains are
already showing up in his business and that, “the results are revenue growth that is
North of everything that we’ve actually ever seen in this company [before].”

The goal at the end of the day, says Wann, is “to become the largest vacation rental
company in the world.”

OYO Vacation Homes

Global Footprint: 46,000 fully managed homes and villas available in Europe
(except the UK).
Oyo Take: “With the acquisition of Amsterdam based @Leisure Group, OYO will
offer customers around the world access to beautiful fully managed holiday
homes, spanning from Spain to Norway making OYO a world-leading holiday
homes manager”
Skift Take: Oyo Vacation Homes is less a brand, and more of an internal company
division that itself houses multiple sub-brands. This organization was formed to
house the former @Leisure Group after its May 2019 acquisition. It manages more
than 46,000 homes and villas under localized operations including Bellvilla,
Dancenter, and others. Additionally, Oyo Vacation Homes operates a listing
platform for short-term rentals under the Traum-Ferienwohnungen brand. Traum-
Ferienwohnungen has 80,000-plus ad listings for vacation homes across Europe
which Oyo does not manage.
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OYO Home
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Global Footprint: India, Malaysia, and the United Arab Emirates. We estimate
2,600-plus homes and villas.
Oyo Take: “India’s maiden Home Management System that offers beautiful private
homes in great locations are fully managed by Oyo and make a perfect choice for
staycations.”
Skift Take: Not to be confused with Oyo Vacation Homes, this was Oyo’s initial,
organic foray into the short-term rental business. Launched in September 2017
and still operated separately, these homes tend to skew more urban and more
towards apartments than the @Leisure group inventory. Geography is the other
primary differentiation with Oyo Homes in Asia rather than Europe.

Apartments and Lifestyle

OYO LIFE
Global Footprint: India and Japan
Oyo Take: “Targeted at millennials and young professionals in search of fully
managed homes on long-term rentals, at affordable prices. Under this category,
Oyo offers an end-to-end managed, comfortable, high-quality living experience
that eliminates the hassles of finding, accessing and managing everyday housing.”
Skift Take: This is effectively a move into renting out fully-managed apartments. In
a best case, this is a shift into an exciting new category that several other startups,
both in the U.S. and elsewhere, are trying to crack. We see the potential, but it also
is oddly reminiscent of fellow SoftBank-backed startup, WeWork’s move into
WeLive, which hasn’t lived up to its potential, and may prove to be a distraction
from the core offering.

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CORRECTION: This story has been updated to clarify that Oyo Vacation Homes’
global footprint of 46,000 properties are fully managed by the company. In
addition to these properties, it also operates an advertising platform with vacation
home listings that Oyo does not manage under the Traum-Ferienwohnungen
Brand. Traum-Ferienwohnungen has 80,000-plus ad listings.

Tags: budget hotels, oravel, oyo, oyorooms, skift research

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