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Insight Comment
Reading between the lines it looks like Oyo is effectively outsourcing its expansion plans in the UK to third parties, offering them a slice of revenue and the ability to make money elsewhere. The move makes sense given the company’s well-publicised job cuts announced last year but will be enough to maintain a steady growth trajectory? |
Oyo Hotels & Homes is looking to enlist the help of hoteliers and developers in order to accelerate its growth plans in the UK market.
The company is introducing what it calls a “network developer programme”, which will see those who sign up using “their own team” to sign new properties to the Oyo brand in a dedicated region.
Network developers will get a share of earnings at property level while also being able to generate further revenue by offering other services, such as a full management contract or operational services like food and beverage and staffing.
“As the hospitality and tourism sector begins to open up over the coming months, UK hotels have a great opportunity to benefit from an upsurge in consumer demand and leverage a bumper year for domestic tourism,” Simarjit Manaktala, Oyo regional head - UK & Europe, said.
“In this context OYO’s unique technology-driven services are more relevant than ever allowing hoteliers to capitalise on demand and maximise their revenues. We are delighted to launch this Network Developer scheme which will allow us to supercharge the expansion of our hotel network so we can support hoteliers in achieving their commercial goals.”
Oyo’s plan to effectively outsource its growth to third parties comes after the company drastically reduced its own global workforce by thousands at the start of the Covid-19 pandemic.
Big cuts were made in certain markets including the UK, where numbers at least halved.
Even before the pandemic the sheen was beginning to come off the Oyo expansion story with heavy losses, labour disputes and owner complaints.
Recently, Oyo has looked to address some of the critical feedback in its US market with a slew of technology updates that aim to give partners more control over things like pricing.
Oyo was founded by Indian entrepreneur, Ritesh Agarwal, in 2013 and now has 43,000 hotels operating in 80 countries and 800 cities around the world. It launched in the UK two years ago and has around 200 properties.