Oyo Rooms Business Model used to be a hotel aggregator.

However, it was different from

Airbnb’s business model as Oyo didn’t focus just on the discoverability of the partners among the
users but also on the standardized quality of the services provided.
The customers used to buy the services from the brand Oyo rooms and didn’t care who the
partner was. Just like Uber, Oyo provided rooms with standardized quality and price.
This model was a mix of aggregator business model and franchise business model.
But as time passed, the company built its brand equity and the founders decided to pivot its
business model to a pure franchise business model. In the new business model, OYO takes care
of the entire hotel as a Franchise Model. But the condition is, the hotel owners will have to
handover the overall operations of the hotel to OYO, that would be enlisted under OYO rooms,
and charge a commission on the revenue of about 20 to 25 percent, which depends on the
contract.
The standard of the operations of each hotel is maintained by OYO Rooms itself. OYO has
categorized the rooms basically in 4 categories according to standards, and if the hotel is not
meeting the expectation, OYO takes care of their upgradation.
So, basically the entire hotel is managed by OYO rooms, from manager to staffs and facilities,
and the owner is free of all the maintenance for its hotel. They just have to refer around 20 to
25 percent commission to OYO Rooms.
Advantages of this new model
1. As OYO is totally a technology-driven company, it has all the solutions for hotel
management, due to which the company gets benefitted.
2. This model has simplified the categories of rooms in the entire hotel industry for the
customers, due to which the customers do not have any problems in choosing the hotels.
3. The available inventory of OYO has increased because of the change in the business model.
Disadvantages of this new model
1. Controlling everything improves the Customer’s Experience but it is capital Intensive .
2. OYO could not control the whole customer Experience like the quality of dining, serving
etc.