Oyo Hotels offers Malaysians quality living spaces

• On average, hotel owners see a 20-30% revenue jump after branding
• Orbis app eases the onboarding process of buildings, AI determines best pricing

THE fragmentation that exists in the hospitality industry due to the supply-demand imbalance of quality living spaces presents a pain point for Oyo Hotels to solve.

Within Malaysia, Oyo Hotels and Homes has over 8,000 rooms in 250 buildings across 25 cities in the Klang Valley, Penang, Johor and more.

While the country head of Oyo Malaysia, Tan Ming Luk (pic, right), was unable to place a value on the Malaysian hospitality market, he believes there is a “huge opportunity with thousands of rooms waiting to be standardised.”

Oyo’s technology-driven approach with its full-stack business model is apt due to the increasing mobile penetration rate within the market.

As a full-fledged hotel chain that leases and franchises assets, Tan said that the company is investing heavily in strengthening capabilities in the form of technology, talent and network.

“We have invested heavily in capex, appointed hundreds of general managers to oversee operations and customer experience, created job opportunities for over 100,000 people in India alone and set up over 27 Oyo Skill Institutes globally for hospitality enthusiasts,” said Tan.

On average, over 75% of hotel owners associated with Oyo Hotels have seen an increase of 20-30% in occupancy and a 2.5 times jump in revenue per available room, for every asset operating as an Oyo branded building.

“In December 2018, we saw a 4.3 times y-o-y growth with a realised value run-rate of US$1.8 billion (annualised). We have made this possible by investing in four key competencies in the last five years.”

Leveraging on technology

Among Oyo’s key competencies are its sophisticated onboarding process with the ability to scientifically identify and onboard buildings within a shorter time period using an app called Orbis.

“The app is equipped with multiple features including route planning, meeting management, deal prediction and learning and quiz sections to continuously disseminate knowledge and upgrade the skills of our business development managers.”

Secondly, its renovation capabilities have enabled the group to add 65,000 keys to the hotel chain every month on a global level.

“We have set a new benchmark in transforming and renovating assets in a record time of within 14 days -  a stark contrast to the industry standard of up to 90 days.”

As for the qualitys, Tan assures that it is at the core of Oyo’s operations. Through its skills training institutes, the company benefits “from improving operating efficiencies while maintaining customer loyalty, with over 70% of the top line in India coming from repeat customers and over 90% from repeat and word of mouth customers.”

The greatest value proposition offered by Oyo to asset owners is higher yields. By becoming a part of Oyo’s chain, hotels and assets see an increase in average occupancy from 25% to 65% in a span of three months.

Machine learning and AI tools enable revenue managers to derive the best pricing mechanisms in the industry.

Oyo also recently announced Airbnb’s investment into the company whose “strong global footprints and access to local communities will open up new opportunities.”

“Our teams have observed local nuances with respect to the hotel industry in Malaysia and these observations help us in highly localising and personalising the experience for our guests.

“For instance, as Malaysia hosts a lot of Indian tourists, the hotels provide information on the nearest Indian restaurants,” said Tan, explaining Oyo’s strategy in localising the product experience for users in each market.