OYO USA Clocks 48% Growth in Revenue from Bookings on its Own Platforms
Dallas, Texas
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April 26, 2023 09:30 AM Eastern Daylight Time
Global travel tech company OYO’s US business witnessed a 48% growth in revenue from bookings on its own platform, such as the app, website, mobile web and call centers in Q4 2022 vs same period in 2021. OYO’s app led the growth with a 99% surge in revenue from bookings in Q4 2022 vs same period in 2021. The company had earlier disclosed that its app is the second most downloaded travel app with over 100 million downloads globally. Growth in revenue from bookings via the company’s call centers saw a 59% increase for the same period.
Talking about the improved direct demand, Gautam Swaroop, CEO OYO International said, “US is a highly competitive travel & hospitality market. Driving revenue from bookings onto one's own platform and channels is always a demanding task. While bookings through online travel agents such a Booking.com and Expedia.com play an important role in increasing revenues for our hotel partners, direct demand through OYO’s own platforms leads to better margins for our hoteliers. We have improved direct bookings through simple yet effective measures to bring in operational efficiencies and create a strong business impact. We saw a 3x growth in app conversions and a 2x growth in conversions from the call center using product, price optimizations and by creating operational efficiencies, performance management & better incentive structures in the organization.”
Nikhil Heda, Head of Business Development, OYO USA added, “We have focused on things that matter to travelers while planning their stays and improving reach and readability of our communication. As a result, we have seen 1.4X growth in our email opens and 2X growth in click throughs of notifications on our app. This has resulted in a significant improvement in demand via OYO’s own channels. Optimizations such as focusing on the right SEO keyword and improving property reviews on Google have also resulted in improved direct bookings, in turn resulting in substantial savings in OTA commissions for our owners.”
Commenting on their experience of working with OYO, Ajay Patel, owner of OYO Hotel Eloy Casa Grande, Arizona said, “We have been seeing 1.5X growth in RevPar from bookings via OYO’s app and call center. Over the last 6 months this has resulted in us paying lower commissions. Typical OTA commissions range anywhere between 15% to 18% and reduced reliance on other channels have helped us save over 50% of the commissions.”
OYO offers hotels access to a large base of regular customers through its app and website, and also lists hotels on multiple Online Travel Agents (OTAs) to boost booking demand and, revenue. OYO’s best-in-class Artificial Intelligence-enabled pricing software automatically drives the best booking prices across all channels, based on room type, seasonality and other factors, therefore, enabling such increase in online revenues.
Earlier this year OYO said that it is planning to add over 100 hotels in the US in 2023. This is nearly double the number of hotels the company added to its portfolio in 2022. OYO will focus on adding more hotels in the states of Oregon, Washington, Texas, Oklahoma, Georgia and Florida. Texas continues to be the largest and fastest growing market for OYO in the US, while it also has sizable concentration of hotels in Oregon, South and North Carolina, Florida & Georgia. In 2022, the company saw a ~23% increase in new hotels added to its portfolio in the US vs 2021.
OYO has started offering hotels the flexibility of not having to invest heavily in redoing the hotel to join the OYO platform, something that other budget hotel chains insist on. Therefore, the initial investment to join OYO is minimal. It has been focusing instead on standardizing service led components such as customer support and booking experience.
The company helps ensure great experience for customers, with ease of search and a quick booking experience, highly competitive room prices as per market demand patterns, automated tools such as Artificial Intelligence powered chatbots to quickly resolve customer queries, loyalty programmes and easy refund, if needed.
OYO’s US operations recently announced that it has outpaced the budget hotel segments growth in per available room revenue (RevPar) with an 18% rise in 2022 vs pre-covid year, 2019. The budget hotel segment in the meanwhile, grew by only 6% in the US.
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