In partnership with Action Hotels, the investor, the first property dedicated to "new-age corporate travellers" sets foot in Ras Al Khaimah. Who is OYO? How does it grow? What are its goals? How does Action Hotel intervene in the Middle East? Manu Midha, Regional Head, Middle East, OYO Hotels & Homes, and Christophe Landais, CEO Action Hotels, answered the questions of Hospitality ON.
OYO, Please introduce your company, its DNA & values
"OYO Hotels and Homes is the world’s fastest-growing chain of hotels, homes and living spaces. Our relentless commitment to offering our customers affordable, predictable, and quality living spaces, and our asset owners our full-stack services has helped us re-engineer living worldwide and emerge as a leading global hospitality company. It is our mission to create quality living spaces. OYO started with the belief that everyone deserves a beautifully designed, chic and comfortable living space. And everyone deserves a better life. The company has been committed to change the way people live and it is doing that by upgrading unbranded hotels into great quality living spaces and offering them at affordable prices in the best locations around the world.
Having said that we want to be clear, OYO is not a room aggregator. OYO is not an online travel agency or booking platform. OYO is not some certification company. OYO is not a marketplace. OYO is a hotel chain.
Today, OYO Hotels & Homes is India and South Asia’s largest, China’s second-largest, and the world’s third-largest and fastest-growing chain of leased and franchised hotels, homes & living spaces. Since our launch back in 2013, OYO Hotels has brought about a change in the budget hotel franchising and leasing segment, giving consumers that were earlier subjected to poor quality customer service and mostly unhygienic living spaces who now have the opportunity to experience standardized hospitality at affordable prices. We are now taking our hospitality experience to over 80 countries around the world.
OYO brings its own technology based on artificial intelligence to hotels around the world, for a better revenue management. The company helps independent hotel owners to manage all daily functions of the hotel – visibility bookings, sales channels, customer requests, housekeeping, finances. We are using technology extensively to sustain and increase the quality of operations while reducing the cost. At present, we offer over 20 app-based solutions to ensure hassle-free operations in our hotels while delivering quality-assured experience to our guests.
We have invested heavily in capex and appointed hundreds of GMs to oversee operations and customer experience, created job opportunities for over 200,000 people in our home markets India, China and U.S. alone and set up 27+ training institutes for hospitality enthusiasts. On an average, over 75% of hotel owners associated with OYO Hotels have seen an increase of 20-30% in occupancy, a 2.5x jump in RevPar and significant jump in profit, for every asset operating as an OYO branded building.
OYO today hosts guests from around the world in over 23,000 hotels and over 850,000 rooms, and more than 46,000-holiday homes, adding over 80,000 rooms every month, globally. Every night almost 500,000 heads rest on a pillow in an OYO, a testament to the impact we are creating globally."
Actions Hotels please introduce your company, its DNA & values
"Action Hotels – a subsidiary of Action Group Holdings (Kuwait) is an established leading owner, developer and asset manager of branded three- and four-star hotels in the Middle East and Australia.
Founded in 2005 by H.E. Sheikh Mubarak A M Al Sabah, AHC currently owns fourteen hotels (2,475 rooms) across 6 countries.
Action Hotels is proud to consider itself a first mover in bringing (identifying opportunities, development and asset managing) branded economy and midscale hotels to new markets especially in the Middle East.
Partnering with some of the world’s leading hotel brands (AccorHotels, IHG and most recently OYO Hotels), its strategy of concentrating purely on three- and four-star hotels for over 13 years delivers excellence in this area of the hospitality and tourism market. The diversified portfolio of seven brands across three international operators caters to the regular corporate traveller looking for consistency and comfort during their travel and offers value for money to leisure guests exploring destination cities.
Action Hotels is consistently reviewing and assessing new opportunities within cities, strategic sectors and primary tourist destinations and continues its growth trajectory by investing in projects with compelling returns.
Headquartered in Dubai (DIFC) with offices and management around the Middle East, Australia, France and London, Action Hotels is focused on developing a generation of a global portfolio of landmark affordable hotels.
Action Hotels understands that in order to build a successful and sustainable business model we must ensure that our business adheres to strong corporate values. As such, we are committed to fostering a working environment based on trusted relationships, respect, teamwork, enthusiasm, commitment and care. These criteria have therefore been adopted as our values."
Action Hotels why did you chose OYO ?
"Our property of RAK 146 rooms - 3-star rating, was under management agreement with a global brand until June 2019.
We have been very disappointed by global operators in general both in terms of delivering top line revenue from their distribution channels, and their lack of interest and poor management ability to protect the Owner asset and to extract the expected Gross Operating Profit.
On this case, we had no other choice to terminate prematurely the management contract, and we took the decision to acquire the required resources and to manage ourselves our property.
However, one needed an international brand. We have chosen OYO as global, technologically advanced and proactive hotel brand, under a franchise operating model with the Capital O brand, for its capability to distribute our property that we hope will be better than any other global operator. So far, so good. Time will tell."
OYO, what are your objectives in this geographical area (M. E.)?
"The Middle East is an important market for us and we are witnessing steady growth here. We have recently announced the appointment of Dr Mandar Vaidya as the CEO for the Middle East and Southeast Asia. This appointment comes as a part of the company’s efforts to continue to invest in and attract world-class leadership, as part of its ongoing focus to drive accelerated growth in the Middle East which is a high potential market for us.
In the Middle East, we forayed into the region with the UAE and expanded our presence to the Kingdom of Saudi Arabia. Currently, we have 275+ hotels and homes and 8,000+ leased and franchised homes and hotel rooms across the region and we are aiming to expand our presence in the coming months. In the UAE, we have served over 225,000 guests in 160+ hotels and homes and 2,200+ exclusive rooms in six Emirates, including Dubai, Abu Dhabi, Sharjah, Ras Al-Khaimah, Fujairah and Ajman."
"Recently, we launched our premium offering for business travellers - Capital O - in the UAE. One with Action Hotels in Ras Al Khaimah and another one in Bur Dubai. Capital O is the ideal choice for new-age corporate travellers, as it offers the perfect amenities for business & leisure stays. These premium hotels are located in prime locations and specially curated to deliver OYO’s quality-assured experience at an affordable price. Capital O hotels are equipped with high-speed WiFi, 24*7 food and beverage options with in-room services, buffet-style breakfast and premium amenities, including OYO-branded toiletries.
In the Kingdom of Saudi Arabia, we are present across 14+cities with over 5,800 rooms & about 110 live OYO buildings. The plan is to invest significantly in the Kingdom, and expand to over 17 cities across 6 provinces by 2020. We are humbled and happy to bring this standardized quality experience to the Kingdom of Saudi Arabia where millions of people undertake the pilgrimage of a lifetime. We are committed to creating quality, affordable living spaces and thousands of jobs for the young people of Saudi Arabia. OYO Hotels & Homes in Saudi Arabia is currently run by a majority of young Saudi nationals, and we aim to create jobs for over 5,000 Saudi citizens by 2020. We also plan to employ over 300 local citizens or ‘OYOpreneurs' by the end of 2019. At OYO, we work with small-scale budget hoteliers to improve guest experience and occupancy. No other hotel chain is using technology in this way or empowering small hotels to deliver value. It has been our long-standing belief that provided with the right direction and tools, smaller assets can also generate positive returns. This expansion, therefore, is in line with our quest to support Saudi Arabia’s blossoming hospitality ecosystem and creating infrastructure for asset owners to grow and run successful businesses, all of this while ensuring high standards of quality.
We are honored and delighted to have the opportunity to support the Saudi government’s vision 2030 for the Kingdom of Saudi Arabia and are committed to continuing investing in the multi-billion dollar opportunity in the hospitality industry in the country."
OYO, globally you managed an impressive growth in 6 years, what are your strengths to your point of view?
"In the last six years, we have expanded our presence 800+ cities across the globe, seen a 4.3X Y-O-Y growth with realised value run-rate of $ 1.8Bn (annualised). Our global footprint currently stands at 800+ cities in 80 countries, including India, China, Malaysia, Nepal, UK, USA, UAE, KSA, Indonesia, the Philippines, Vietnam and Japan. Our expansion across India and international territories is backed by our strong operational capabilities and our ability to use technology to improve efficiencies at every touch point.
We have made this possible by investing in four key competencies
- Sophisticated leasing and franchising process:
At OYO, we have developed the ability to scientifically identify and onboard strategic buildings within a shorter time period (vs. others). The approach and strategy of our Business Development team is powered by Orbis. The app was built in-house to assist the team in identifying the right lead, pitching the right deals to owners and having the building transformed to OYO standards. All this work is performed with the help of the App within three meetings, which is in stark comparison to the industry standards. The app is equipped with multiple features including route planning, meeting management, deal prediction and learning and Quiz Sections to continuous disseminate knowledge and upgrade the skills of our BD managers.
- Best-in-class renovation capabilities:
Our deep renovation capabilities have empowered us to add 80,000 exclusive keys to our chain every month at a global level. As the world’s fastest-growing chain of leased and franchised hotels, homes & spaces 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 upto 90 days.
With a 1,300 OYOpreneur-strong team of civil engineers and designers in India, China and other international markets, OYO Hotels has powered the transformation of thousands of buildings across territories while promoting sustainable infrastructure in the hospitality sector. We utilize AI-led design approach while evaluating guest feedback and identifying their most-preferred designs. Our full-scale, capability-led model allows it to undertake a 360-degree transformation and renovation while upgrading the existing structure of an asset - from flooring, plumbing, air conditioning, painting, electrical fixtures to utilities upgrade.
- Hotel Operations:
Delivering quality-assured experiences is at the heart of what we do at OYO Hotels and Homes. We are committed to offering customers good quality, affordable and predictable living experiences while empowering over 23,000+ franchise partners and asset owners with the operational expertise and technology capabilities. We focus heavily on service quality and invest in it, both in the form of technology and talent. We also have over 27 OYO Skill Institutes where we train hundreds of hospitality enthusiasts every month. We are benefiting from improving operating efficiencies while maintaining customer loyalty.
- Higher yields for asset owners:
All the above mentioned facets come together and create an ecosystem of efficiency through which we are able to deliver higher yields for our asset owners. Every hotel or asset that becomes a part of OYO’s chain, witnesses an increase in average occupancy from 25% to 65% in a brief span of three months. We have a team of revenue managers who are able to derive and drive the best pricing mechanism in the industry with the help of advanced machine learning and AI tools, so as to optimize for best outcomes for customers and partner franchisees alike."
Actions Hotels, do you plan to work in other segments than economy and midscale?
"Action’s strategy is to provide quality hotel accommodation at exceptional value in prime locations.
We will remain consistent with our growth development strategy and will keep on focusing on the development of a portfolio of high-quality economy and mid-scale hotels, offering excellent service and value and delivering superior returns to our owners and shareholders."
"We have just completed in Dubai and now opened since the 1st August 2019 a brand new one of a kind 220 rooms Novotel hotel property in Bur Dubai - Health Care City under the Novotel brand of Accor. The Novotel Bur Dubai is positioned as upper mid-scale and provide top facilities in perfect location et affordable price."
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