OYO Rooms is the SoftBank-backed budget hotel chain that was once lauded as the next WeWork, then SoftBank’s big white hope. And, recently, has been derided as the next WeWork next WeWork The New York Times WeWork IPO withdrawn as investors grow wary Read more , now SoftBank’s big black spot.
Over the years, The Ken has written a number of stories about OYO Rooms. Many of these were critical in nature, asking tough questions about OYO’s business model, value proposition, and corporate governance aspects. But these stories were written purely from an observer’s standpoint—an external perspective that attempted to make sense of the elephant’s contours, bit by bit.
Today was the first time OYO’s founder Ritesh Agarwal spoke with The Ken.
In a freewheeling and candid interview, Agarwal addresses many tough questions posed to him about OYO’s past. He also shares his perspective on how the pandemic has impacted and will shape the future of hospitality. And, in particular, the future of OYO.
Q. As you probably know, we have written many stories about OYO and have often asked harsh questions as well. So I was curious, why did you agree to take this meeting?
I have never believed that your intentions were wrong. From my perspective, your stories may have some interpretation, some information or some perception that may seem wrong. And I can use this opportunity to at least share our side of the story.
Q. So let’s hear your side of the story, starting from the very beginning. What was the original idea behind OYO?
I started with Oravel. Oravel was modelled on Airbnb and was a semi-OTA (Online Travel Aggregator) of sorts, primarily offering vacation homes and guest houses like how companies like Stayzilla used to offer at that point of time. However, what I realised is if you try and do something like that, you have to fight the chicken and egg battle—you have to fight the battle of attracting consumers and also the battle of ensuring supply.
The problem, as I saw it, was not that there weren’t enough hotels in India—there has always been enough supply of hotel rooms to cater to demand at all price points. The problem was that for budget travellers, the hotel experience was often broken. Unlike in premium hotels where the user experience was not just standardised but also predictable—irrespective of which city the traveller went to—staying in a budget hotel was a hit-and-miss experience and usually unpredictable.
Our brand promise with OYO was that for roughly Rs 1,500 (US$20) per night, a traveller would get a clean room of a minimum specified size with AC, WiFi, and free breakfast.