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OYO Rooms: Their Hospitality and Customer Satisfaction
Article · October 2020
DOI: 10.32535/ijthap.v3i3.942
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OYO Rooms: Their Hospitality and Customer Satisfaction
Shobha Sharma1, Nidhi2, Smita Pathak3, Rudresh Pandey4, Wang Tianen5, Daisy
Kee Mui Hung6, Huang XiaoLin7, Wang Ying Xuan8, Virat Rana9, Prudhvi Naresh10,
Ranjith P.V11
ABES Engineering College1,2,3,4,9
19th KM Stone, NH 24, Ghaziabad, Uttar Pradesh 201009, India
Universiti Sains Malaysia5,6,7,8
Jalan Sg Dua, 11800 Minden, Pulau Pinang, Malaysia
CMS Business School10,11
No.17, Seshadri Rd, Gandhi Nagar, Bengaluru, Karnataka 560009, India
Correspondence Email: shobhakaushik20@gmail.com
ABSTRACT
The study is being done on the problems faced by the hospitality and tourism
industries. Their growth and development. But here the research is done specifically in
respect to OYO. The objective here is to tell the growth story of OYO room in the most
objective way possible as a "situation case". One of the efforts has been to provide a
body of information of sufficient size to analyse the reasons for the current success of
OYO room in particular and the emerging Indian business model of innovative use of
technology and marketing principles. The case presents the successful story of the
entrepreneur Ritesh Aggarwal, about how he used the idea of hospitality and hotels
that generated a significant investment in this segment. The government is in action is
focusing on "Make in India", which means that entrepreneurs like Ritesh Aggarwal will
be encouraged and supported. It is necessary to create a comfort zone for the young
minds so that they can become successful businessmen, leading to the economic
growth of the country. So, this Project Report is being prepared by researching the
problems faced by the OYO regarding its hospitality and customer satisfaction and its
marketing. There are some particular solutions that are recognized by our team for the
respective problems which will be useful for the hospitality and tourism industries to
overcome certain problems. These solutions will open the doors for the industries that
are going to be in this field referring the past data analysis of OYO which is studied and
prepared by our team in this Research Project.
Keywords: Customer Satisfaction, Hospitality, OYO
INTRODUCTION
The Indian hospitality industry and tourism has become one of the biggest key drivers
in the growth in the service sectors of India. Tourism in India considers significant
potential as variety in ecology, rich historical heritage and culture, terrains and places
of natural beauty spread across the country.
Investments
Private equity investments bumped thrice in 2017, with the transaction worth around
$619 million closed during the year, which renewed the interest in the investment
sector. OYO Hotels and homes recently introduced a fresh financing of $1.5 billion,
with the founder of OYO ritesh aggrawal. OYO will also get funds up to 800$million
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from the existing partners - current valuation of the company is 10$billion after the
funding of the last round -In October 2019, series F led by soft bank group, light spread
venture partners, sequoia India funding$1.5 billion. OYO registered a revenue of USD
951 million, which is 45 increases on a year basis to compared to USD 211 million
Initiatives Taken Government
1. Indian government had taken many steps in prompting of tourism as follows:
2. 1 – “statute of unity” the longest statue in the whole world is made for increasing
the tourism
3. 2 – Indian government has aimed to capture the 1% of international tourism while
the situations are all right, the government is aiming 2% of international tourism
till 2025.
4. 3 – while in the recent budget of 2019, government had realised 1,160 crores of
rupees for the development of tourism under the mission swadesh darshan.
5. 4 – And OYO has also entered into the international market like china, Malaysia,
sri-lanka, south Asia.
Analysis of OYO
The journey of OYO has been started when the founder of OYO, ritesh aggrawal
leaved his college and started his career in his very first start-up named oravel stays
pvt. Ltd. The start-up was designed as an online platform of budget accommodations,
bookings for hotels. But soon ritesh realised that there is lack of predicability in this
field, and came up by rebranding its start-up as OYO rooms in 2013 with a major
mission.
Leaders of OYO
Ritesh Aggrawal
Ritesh aggrawal is the founder and CEO of OYO rooms, he started his career in the
age of 17, as with the idea of travelling but by remaining in budget.
Abhinav Sinha
COO
He is a chemical Engineer who looks after the operations of OYO. He also looks after
the promotional activities of OYO.
Major Players in the Industry
The platform which is going to capture the whole market in coming four years is online
travelling and hotel booking, as they are on a very interesting phase. OYO being a
hospitality Industry, got a fund of 1 billion dollar which supported OYO’s 95% work to
be direct on online channels and websites and also supported its promotional activities
too.
Benefits
1. The online booking system opens up new challenges for the industry and it also
gives the ultimate benefits to the travellers. One can book the room whenever he
wants. This online booking system do not bound the working hours of the
company.
2. This online booking system of hotels will help to increase the productivity of the
workers and also make their work efficient. The one should not have to wait for
booking call, they can book whenever its comfortable to them.
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3. The one prospective of online booking system is it will help your business to grow
and touch up new heights. It is easy to design online travel packages and let the
customer to choose the desired package according to their budget.
4. The online booking system also help in receiving the payment safely and in a
secured manner which also adds a positive point to it. while the system can have
payment at the time of booking from customers and if there is any cancellation in
program so the company will keep some amount as compensation.
5. The system of online booking strengthens up the process of work and also
decreases the work pressure on the staff. It makes everything according to the
needs of the customer and also remains updated with the no rooms available.
6. In this era of online working, each and every thing is available online. If one does
not have any information about anything so he checks online about that, so the
company should have a strong set up online so that it could take up the benefits
and also grow with the trend.
7. This online booking platform is designed for giving ultimate comfort to the
customers, while the company must give the assurance of security and safety.
The company must have the service of customer care and feedback option by
which company can resolve the problems.
Marketing Strategies (Marketing Mix)
Strategies related with OYO
The product strategy of OYO is basically to provide good quality and standard goods to
the customer. It also trains to the people with whom it collaborates and also checks up
the quality and standards in each hotel so that it could meet the desire or expectations
of the customers. OYO Rooms has become the most trusted brand for travelling safely
and in secured manner. While it also provides the sets of different travelling packages
which also attracts the customer to travel around and it is now situated with each and
every corner so could be easily accessible.
OYO rooms set up their pricing policy by keeping each and everyone’s budget in mind,
while OYO is associated with the small as well as luxury hotels, so according to the
comfortability of the customer the one could choose the hotel according to their budget.
OYO rooms are focusing on capturing its future customers, taking feedback, and
marketing on digital platform. OYO also has a strong set up and presence over social
media either on twitter, Facebook, Instagram or YouTube.
Year/ Funding Source Amount
1. 2012-December $ 5 Million
Venture Nursery
2. 2013 $0.1 Million
Thiel Fellowship
3. 2014-February NA
Light speed Ventures
4. 2015-March $ 25 Million
Light speed, Sequoia and others
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5. 2015- July $100
Softbank
6. 2016-August $90 Million
Softbank And Others
7. 2017-April $250 Million
Softbank and Others
8. 2018-September $1 Billion
Softbank and Others
9. 2019-October $1.5 billion
SoftBank Group, Lightspeed Venture
partners sequoia India
10. 2020 Softbank and others $800 million
Organization structure of OYO
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Objectives of The Study
Following are the main objective to study about the customer satisfaction on OYO
Rooms:
• To study the Brand of OYO Rooms, their Hospitality Industry & consumer’s
perception with its competitors as well as customer’s satisfaction.
• To know why people, book Rooms from different Online apps and about the
perception of the customers.
• To study the brand image of OYO.
• To find out the level of satisfaction of the Users on different attributes and to meet
the desired targets.
• To identify strength weakness, opportunity and threats for OYO and their initiative
towards it.
• To identify the factors which are most essential for selecting the Hotel Booking
App and what distracts the customers the most.
• To identify the main factor in Online Hotel Booking which are most liked and
appreciated by Customers.
• To identify the most preferred payment method for Online Hotel Bookings.
The management keeps up a check upon the success and failures of the hotels with its
deals, it assures that there will be a high degree of interaction between the customer
and staff, while it will provide assurance to the customer. Another major issue for
concern is the matching up of service quality shown while booking up the hotels and to
meet the desired expectations of the customers. After the research of up to twenty
years this still remains a major issue for concern for hospitality industries.
Service Failure
Service failures happens when the customer does not get the quality or the standard
which he expected to get and this will result into service failure. Through service failure
there is loss of revenue, dissatisfaction of customer, trust of customer also got broke
down, while it impacts on the hotel decline, negativity in the staff, morale gets down.
Service Recovery Strategies
Here are some service recovery strategies which will help the management to grow
further
• Apology
• Improvement
• pay-off
• stick together
• adoption
• justification
• remarkable treatment
• hindrance
RESEARCH METHOD
Secondary Method
In this project we have collaborated the information through original websites of the
company. While from different sites also, we have taken information from different
countries. As we have worked with international students.
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RESULTS AND DISCUSSION
Major Challenges Faced by The Company
Problems faced by the company:
1. The problem which is faced by many hotel owners who collaborated with OYO is,
they claim that OYO do not fulfils the contract between them, mismanagement of
revenue, while many hoteliers also claim that the OYO audit, standard of meeting
quality, training given to the employees impacts heavily, as they could not even
earn that much.
2. The OYO has also been surrounded by many allegations from police as many
hoteliers claim that they do not get the full amount of profit as agreed in contact.
In respect to which hoteliers have claimed cases on OYO for compensation
3. As there are many allegations claimed on OYO which is impacting and even
questioning the goodwill of the organisation. While it is impacting negatively on
customers, as these situations creates a perception in customer’s mind that the
organisation is not safe or secure to travel with.
4. As there is huge investment done by many investors and the organisation for its
growth, but the question still remains the same, that if it could give the assurance
to the customer for a safe and secure travel?
CONCLUSIONS
Hospitality industry is at major turning point, while there are much interesting things
which are left to happen still but will be going to happen in near future, many industries
are running in this race which is providing cut to cut competition and challenges as
every organisation wants to lead this race, while OYO is also increasing day by day
through its digital platforms either twitter, Instagram, Facebook and you tube, OYO is
also taking feedbacks of their customer to resolve the problems as soon as possible,
this is happening for the very first time that companies are giving much importance to
the customers query. OYO is also focusing on the pricing strategies and standard or
quality or productivity of hotels.
1. There is a strong Competition among different brands for acquiring the market
space increasing day to day
2. Company should target the right customer and through right Channel and should
keep the goal in mind.
3. Most of the Customers Are Youth who are post graduates or going to offices so
marketing strategies should be made which can benefit everyone.
4. The product development is also an important factor as the needs of the
customer keeps changing with time and can’t be predictable, so the company
should be diverse in all aspects.
5. Tourism should be encouraged and promoted through various
REFERENCES
https://economictimes.indiatimes.com/small-biz/startups/newsbuzz/
https://en.wikipedia.org/wiki/OYO_Rooms
https://www.google.com/search?q=organisation+structure+of+OYO&bih=657&biw=136
6&hl=en&tbm=isch&source=iu&ictx=1&fir=C_fYIKJZIWdR6M%253A%252C2ns0
G6AB0V2ePM%252C_&vet=1&usg=AI4_-
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kRK51DIOH3MEOQFrKSgq83iQWZ9eA&sa=X&ved=2ahUKEwjbkeXj6ZzpAhUC
VysKHb1aA-AQ9QEwAHoECAoQHQ#imgrc=C_fYIKJZIWdR6M
https://inc42.com/features/what-are-the-current-problems-being-faced-by-OYO/
OYO-to-raise-1-5-billion-in-latest-round-of-funding/articleshow/71476785.cms
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