Has IPO-linked travel tech giant OYO regained the trust of its hotel partners?

Has IPO-linked travel tech giant OYO regained the trust of its hotel partners?

Let’s take a closer look at its patron policies through its draft red herring prospectus (DRHP) filed with SEBI.

As travel tech major OYO gets ready for its much-awaited public listing, the proceeded with fulfillment of its hotel partners and winning back disappointed accomplices will assume a critical part in deciding how its business performs and, likewise, how its stock holds up. The organization has recently been impacted by a some of its hotel partners publicly complaining, documenting cases and in any event, keeping in touch with the controller. The moot question here is: Has IPO-bound OYO recaptured the trust of its hotel partners which it likewise addresses as Patrons?

With over 157,000 storefronts worldwide, the 40 reported cases against the company or its directors translate to less than 0.02 per cent of its storefronts. OYO sources say that majorly of these originate due to shifting from minimum guarantee to revenue sharing arrangement. As per DRHP, at its peak, 14.7 per cent hotels had minimum guarantee. This number is down to nearly zero now.

After bingeing on growth and expansion, the company seems to have refocused its priority to course correct on the hotel partner front.

Revenue growth is by far the biggest and most meaningful value proposition that OYO claims to provide its hotel partners worldwide. Its DRHP tries to prove it by showing the median revenue growth for a storefront after 12 weeks of a hotel joining the OYO platform.

The highest revenue uplift for storefronts is in the European Vacation Homes Business at 2.4 times, while India is still at a healthy 1.9 times increase in revenue.

The platform has several revenue enhancement tools, including machine-learning based dynamic pricing algorithms which use hundreds of parameters such as the supply and demand, seasonality and local trends to arrive at the optimal real-time price for a room and thus maximising partner revenues.

Another pricing tool is the Tariff Manager, which gives partners control over pricing based on their understanding of potential local demand. Currently, 45 per cent of OYO hotels use a tariff manager on a monthly basis globally.

It has introduced a prepaid e-wallet to simplify revenue collection and reconciliation process and moved from a monthly reconciliation process to now offering hotel partners daily payouts to improve their working capital flow. It does consistent engagement with partners now via regular town halls. All of this has led to an increase in Patron satisfaction score from 30.1 per cent for the three months ended September 30, 2020, to a healthier 72.3 per cent for the three months ended March 31, 2021.

OYO now has over 2,700 hotel partners with more than one property signed up on its platforms. For India, this translates to 9.5 per cent of the hotel owners. New hotels are joining the OYO platform via a self-onboarding tool, ‘OYO 360’, which automatically generates digital contracts based on property details and KYC documents provided by hotel partners.

In fiscal 2021, almost all the company’s contracts with new hotel Partners were signed and managed digitally, says the DRHP. However, OYO still hasn’t been able to assuage all of its sceptics. Some traditional hoteliers still believe that the model of offering season wise pricing with minor discounts is the only way to keep the small hotels category viable.

Few others are still to come to terms with the abolition of the minimum guarantees which gave them certainty of revenues and are still in courts demanding compensation. There are signs of thawing though; according to company sources, close to 1,300 hotel partners facing issues in the past have joined back. Given the buoyant IPO market, OYO’s public offering may sail through successfully, but the continued partner satisfaction will have a huge impact on its growth and hence its stock performance. A point OYO’s founder Ritesh Agarwal would do well to take note of.

Disclaimer: If you need to edit or update this news from compsmag then kindly contact us Learn more

For Latest News Follow us on Google News


Latest Headlines
  • Show all
  • Trending News
  • Popular By week
PlayStation Plus games for February have been announced by Sony
PlayStation Plus games for February have been announced by Sony
According to documents seen by Bloomberg, the new subscription service is codenamed ‘Spartacus’ and will combine the current PlayStation Plus and PlayStation ...
The Bristol Press – Bristol Board of Finance Purchasing Committee excludes Guida-Seibert Dairy of New Britain from other delivery contracts
The Bristol Press – Bristol Board of Finance Purchasing Committee excludes Guida-Seibert Dairy of New Britain from other delivery contracts
Guida was able to speak their position during the meeting, said Burns, but in the end the committee decided to enact the city’s debarment procedures. The board ...
Are you owed money as part of a securities class action lawsuit?
Are you owed money as part of a securities class action lawsuit?
How to Claim Funds from a Class Action Suit Discover: How Much Is Snapchat Worth? Class action suits are important to help ensure that companies operate ...
COVID UPDATE: CT positivity rate is 9.73% |  Connecticut News
COVID UPDATE: CT positivity rate is 9.73% | Connecticut News
On Thursday, 693,386 COVID-19 cases have been reported since the beginning of the pandemic, which is up 3,036 since Wednesday. Officials say 31,201 tests were ...
The Xbox Game Pass for Shredders has been leaked on the Microsoft Store
The Xbox Game Pass for Shredders has been leaked on the Microsoft Store
Shredders Xbox Game Pass Release Date Leaked On MS Store 2 The game is coming to PC too, supposedly both on the Windows Store and Steam, but the console ...
Burrell Behavioral Health Opens New Space for Primary Health Care |  News
Burrell Behavioral Health Opens New Space for Primary Health Care | News
The new health center is able to serve individuals in need of the following: family medicine, infant/child care, internal medicine, elderly care, primary and ...
Adani Wilmar's initial public offering (IPO) received a 4% subscription on day one, with a retail share of 9% reserved
Adani Wilmar’s initial public offering (IPO) received a 4% subscription on day one, with a retail share of 9% reserved
Adani Wilmar, which sells cooking oils under the Fortune brand and various other food products, is going to raise Rs 3,600 crore through public issue which ...
Tata Sons president says, Takeover complete, happy to have Air India back
Tata Sons president says, Takeover complete, happy to have Air India back
“Totally delighted that the takeover process of Air India is complete. We are very happy to have Air India back in the Tata Group. We look forward to working ...
BHEL, United Spirits, JSPL and other stocks in the news today
BHEL, United Spirits, JSPL and other stocks in the news today
Jindal Steel & Power: ICRA has upgraded its rating from A+ with ‘Positive’ outlook to AA- with ‘Stable’ outlook on the long term bank facilities and has ...
Economic indicators flash early warning signal for India's recovery
AI-powered digital skills assessment start-up iMocha raises $14 million
“Without a skill assessment platform to help measure and scale their talent pool, businesses will quickly lose out on talented team members,” said Amit ...
Show next
We will be happy to hear your thoughts

Leave a reply

Compsmag - Latest News In Tech and Business
Logo