OYO Business Model

History of oyo:-

Founder of oyo rooms is Ritesh Aggarwal, started his company in 2013 when he was just 21. Earlier company name was ORAVEL STAYS PVT. LTD. Till now, he got the funding if $188 million (1300 crore) by SoftBank (maximum funding).

Introduction:-

Oyo rooms is a hotel aggregator but different from other because other do listing by hotel names but oyo list hotels by their own names like oyo flagship etc.

Working:-

Other companies like makemytrip, goibibo, Cleartrip etc. work on commission basis for booking of rooms and hotel but oyo rooms work on reselling basis.

Revenue model:-

Oyo book hotels in advance and get high discount by hotel owners. Benefit to hotel owners is they get bulk bookings in advance.Benefit to customer is high discount. Let me explain by an example:-

If the cost of 1 room/night=2000 rs

Oyo rooms get 50% discount=2000*50/100= 1000rs.

Oyo resell at 1200 rs

Profit to customer=800 rs.

Profit to oyo is 200 rs/room.

Now,

Expenses:-

1. On oyo rooms site 4000 hotels are listed. So , advance payment to 4000 hotels.
2. Approx 1000 people are working in oyo rooms. So, Salary is also a part of expenses.
3. Expenses of marketing team and marketing on social media and website is also a part of expenses.

Conclusion :-

Company made a revenue of approx 3000 crore. But expenses are more than revenue.

So , currently company is in loss but business model is reliable. Hope they will be in profit in future.

Follow me for more business knowledge and self improvement tips.

If you want to know me more, see my previous Answers.

Thank you!!.