With the recovery the hotel industry experienced in the second half of 2021, Oyo Hotels & Homes International President Prasun Choudhary said company has high expectations for 2022.
There’s a lot of pent-up demand, and people are ready to travel at any opportunity, he said. From a macroeconomic perspective, the team at the India-based hospitality brand company expects this to be a much better year than last.
The worst of the COVID-19 omicron variant appears to be over, resulting in a travel boom in the spring and summer, he said.
“The last two years also gave us a lot of time to think about our strategy, to think about how we can innovate more on our products, more on our technology,” he said. “It really made us even a much more technology-first company.”
When facing the challenges created by the pandemic, Oyo quickly pivoted to a tech-first approach to help the company through it, Choudhary said.
“We went back to our drawing boards during the quarter and said, ‘How can we implement more products, bring more innovative products on the market and become a much more tech-enabled, tech-first company?’” he said. “And I think that has worked for us.”
Oyo’s team has come up with great products for its hotel owners and guests, he said. Specifically for owners, the company came up with new ways to improve revenue, further sophisticate its dynamic pricing ability, build more artificial intelligence-based algorithms and add more flexibility through technology. Guests had more contactless options to help them feel safe during their stays.
Oyo is present in more than 35 countries with more than 157,000 storefronts, a term that the company applies to its hotels and homes, Choudhary said. While open to the possibility, the company doesn’t have any plans of launching in a new country this year. Instead, its focus is on further penetration of the markets in which it currently operates.
The company is currently in nearly 40 U.S. states with plans to expand in the states Oyo already has a presence in, he said. It plans to bring more tech innovations to U.S. markets, allowing it to grow further.
Working With Owners
In the last month, Oyo relaunched its Patron Prosperity Program for owners that it started last year. The program focuses on revenue growth, freedom and flexibility, customer delight and an enhanced patron experience. Throughout the year, the company will offer new programs and technology to owners and guests to focus on these four targeted areas.
The company has its Oyo Advisory Council, made up of owners who advise the company at frequent intervals on the owner perspective, Choudhary said. Revenue recovery in particular is one of the biggest challenges that every owner is concerned about.
As a result, Oyo has focused on revenue management and dynamic pricing, he said. It has given more flexibility to direct managers, putting smart pricing in owners’ hands so they can change rates as they need. Its online travel agency product gives owners more flexibility in registering their properties with different promotions available on OTAs.
Oyo constantly benchmarks itself against reports from STR, Choudhary said. For nearly two years, Oyo has outperformed STR’s benchmarks at both the national level and at regional levels. STR is CoStar’s hospitality analytics firm.
“That gives a lot of confidence to our patrons that yes, OYO's revenue management, Oyo’s dynamic pricing, Oyo’s technology is working well for the patrons,” he said.
Oyo has a revenue scorecard it uses for each property, telling owners where their hotels stand at a point in time, he said. When giving owners the report, the company also explains what it will try to do for the owners and how it could improve revenue through things such as dynamic pricing and OTA partnerships.
Because owners know their markets and competition, owners can choose their own competitive sets, he said. The company’s proprietary automated comp-set pricing logic guides owners and allows them to see how performance has improved over time. Revenue managers assigned to the properties work with owners to refine their practices and comp sets.
Guest Trends
Booking windows are still short compared to how far ahead guests used to book, Choudhary said. It used to be that many guests booked about six months in advance, but now they are waiting until much closer to when they will travel.
Guests are also using more automated ways to book with less human interaction, and many are using the company’s app to do so, he said.
Guests have become more tech-enabled during the pandemic, Choudhary said. That, coupled with many guests’ desires to have less human interaction during their stay, has resulted in advances in contactless services, such as automated check-in and check-out, he said.
Hospitality’s high-touch service will never end, but it will be balanced against the room for growth in automation, he said. In the premium segments, people still want to be spoiled and be treated like royal guests, so the higher-touch sector will still exist, he said.