In 2013, 18-year-old Ritesh Agarwal founded OYO Hotels & Homes in India.
The company began as Oravel Stays, a platform for listing budget accommodations. After seeing a larger opportunity in real estate, Agarwal pivoted the company to the OYO Hotels & Homes that people are familiar with today.
It is now one of the world’s fastest-growing chains, with more than 13,000 franchised and leased hotels and 6,000 homes and spaces. Altogether, there are some 450,000 OYO rooms in more than 500 cities around the world.
“The first lesson I learned was the ability to understand customer needs in a holistic and nuanced manner. The second big lesson I learned was the value of perseverance which, in my view, is an irreplaceable trait. There is always a light at the end of the tunnel,” he said in the book Asian Founders at Work by Ezra Ferraz and Gracy Fernandez.
In the book, Agarwal recalled how he saw an opportunity because he noticed that every hotel or chain was focusing on hotels with more than 100 rooms, not paying much attention to smaller accomodations.
In OYO, they invested in the essentials such as linen and flooring, basic renovation, customer service at reception, room service, hygiene, and maintenance of the hotel.
“Gradually, we saw an increase in occupancy and then we had hoteliers in the neighborhood reach out to us to understand what we were doing differently. The rest, as they say, is history,” he said.
Today, approximately ninety percent of OYO’s business comes from repeat and word-of-mouth customers, which Agarwal said is proof that they are doing something right.
“Our mission and vision have not changed since we started. Right from day one, we were committed to our mission of delivering a chic hospitality experience at hard-to-ignore prices with a focus on creating beautiful living spaces and changing the lives of over 3.2 billion middle-income people globally,” he said.
OYO expanded overseas because they wanted to see if they could make a positive difference in the markets where the budget hotel segment was highly fragmented. Agarwal said they approach every new market not as an Indian startup setting up shop in the country, but like a local entrepreneur building and localizing the OYO business model to make it work in that market.
In the Philippines, for example, they put a copy of the Bible in drawers of each room to respect local practices and beliefs.
Agarwal said: “We respect that each market is unique in its own way, so we localize the product experience and interiors of our buildings, and our overall approach.”
Asian Founders at Work by Ezra Ferraz and Gracy Fernandez is published by Apress.