Using tech to get low- cost hotels

Ritesh Agarwal, CEO of OYO Rooms, in one year has been able to expand his branded budget hotels ( BBH) from one hotel in 2013 to more than 200 hotels in 10 cities booking 50,000 room nights every month

Leveraging internet and mobile technology and special apps Ritesh Agarwal, CEO of OYO Rooms in one year has been able to expand his branded budget hotels ( BBH) from one hotel in 2013 to more than 200 hotels in 10 cities booking 50,000 room nights every month.

He expects to target complete 1,000 hotels in 25 cities by this year end. Mr Agarwal, 23, is able to provide rooms at rates ranging from ` 999 to ` 1,499 ( with taxes) with free breakfast, ac rooms and wi- fi service, leveraging the fact that hotels with room rates below ` 1,000 a night do not attract service tax.

The average age of their customers is between 26- 35 years, and the average occupancy rate is 80 per cent against the industry average of 40- 45 per cent.

Mr Agarwal has fashioned an exclusive business model that does not exist anywhere in the world, as he claims.

OYO Rooms works on the franchise model. “We don’t own the hotels and so are asset light in this space. We partner with a hotel owner and transform and rebrand the hotel. We invest in standardisation of rooms and maintain consistency of quality and pricing because of the unique technological processes we have built and are able to monitor every touch point of customer experience,” said Mr Agarwal

There is an App that ticks off 12 items, and items from luminised bulbs to size of TV, size of bed, washroom amenities and linen quality are standardised.

Mr Agarwal says he has no competition in his branded budget hotels business as even hotels that claim to be budget hotels start at ` 2,000 to ` 3,000. Now if other want to play catch- up it will not be easy, he says.