Effective Marketing Strategy of OYO

OYO Rooms, also known as OYO Hotels & Homes is the third-largest hospitality chain globally providing a comfortable room stay and ensuring the acceptability of the services by the OYO's customers in more than 80 nations. Incorporated in 2013 by Ritesh Agarwal (one of the youngest Indian entrepreneurs, the founder and CEO of OYO Rooms) it has established itself as the fastest-growing network of hotels offline and online.

Headquartered in Gurgaon, it has expanded its reach worldwide within the span of 8 years and by employing over 17,000 employees globally, of which approximately 8000 are in India and South Asia. However, this is not the only reason why OYO has recorded such a huge success. Its excellent marketing strategy has seen to it that it continues to be a leading hotel chain.

OYO Marketing Strategy

Oravel to OYO Rooms
Segmentation, Targeting and Positioning of OYO
Marketing Mix of OYO Rooms

Product in the marketing mix of OYO
Promotion/Advertising in the marketing mix of OYO
Pricing in the marketing mix of OYO
Place in the marketing mix of OYO
People in the marketing mix of OYO

Digital Marketing Strategies of OYO
Conclusion
FAQs

Ritesh Agarwal started his journey at the age of 17 and is considered to be one of the youngest CEOs in India. In 2011, Ritesh moved to Delhi with intention of starting his own business. Soon, he started traveling extensively across India and stayed in PGs or budget hotels. These unpleasant traveling and stay experiences led him to launch Oravel Stays in 2012.

Ritesh Agarwal-Founder & CEO of OYO Rooms

Oravel to OYO Rooms

Oravel Stays Pvt.Ltd was Ritesh's first startup. Oravel was designed as a platform to enable the listing and booking of budget and premium accommodations.

It was meant to be a destination for short and midterm rentals for bed and breakfast joints, private rooms and serviced apartments.

Oravel was then transformed into OYO Rooms in 2013 when Agrawal realized that combination of bed and dinner is not sufficient. He proposed to make it an affordable and standardized accommodation.

OYO rooms are India’s largest branded network of budget hotel chains. It currently operates in more than 500 Indian cities including major metros, regional hubs, leisure destinations and pilgrimage towns with a current valuation of $9 Billion.

They offer the hotels to their clients and retain a proportion of the profits.

OYO Rooms is a budget hotel aggregator in India. In order to standardize different measures in each room, OYO Rooms partners up with hotels, including free wifi and breakfast, flat-screen televisions, spotless white bed linens, toiletries with a brand name, 6-inch showerhead, drinking cup, etc.

Segmentation, Targeting and Positioning of OYO

OYO uses a mix of demographic, geographic and psychographic segmentation strategies to understand the changing needs of the customers in the competitive market. OYO segments the market in the following manner:-

OYO Townhouse targets Millennial travelers.
OYO SilverKey caters to the need of corporate travelers.
OYO Vacation Homes target the people who come on vacation at the beach or a villa on an exotic island.
OYO Life provides residential space.

Targeting strategy is the cornerstone of the product development process. OYO uses a differentiated targeting strategy for different products categories.

Corporate tie-ups for airline travelers.
Tours and travels.
College students or working professionals who are in search of fully managed homes on long-term rentals at an affordable price.

OYO uses a value-based positioning strategy for its customer by providing:-

Standardized budget hotels.
Luxurious productive place.
Open grass greenery.
Better room service.

Marketing Mix of OYO Rooms

As OYO Rooms concentrate on co-branding, they operate differently from OTAs (Online Travel Agency). They state that they are working with zero-to-2-star hotels and guest houses, 'standardizing' them and getting them customers through their website and apps. Usually, other hotel aggregators simply connect the customer with the hotel by listing hotels on their website and take a commission as their revenue. They would work out a deal with the hotels with a minimum order guarantee per month and are able to provide discounted rates and deals on the room rates compared to the rates provided by the hotels directly to a normal guest.

OYO’s market coverage has swiftly increased because of being listed with travel aggregators like MakeMyTrip, clear trip and hotels.com. Their aim is to target small business travelers and budget tourists to eminently swift-cash and that works in favor of OYO because revenue gets realized quicker too.

Product in the marketing mix of OYO

Oyo has a wide range of products and services that they offer to their customer as per their need. OYO Rooms, OYO Hotels & Homes has a multi-brand approach. These include:

OYO Townhouse
OYO Home
OYO Vacation Homes
SilverKey
Capital O
Palette
Collection O
OYO LIFE
YO! HELP

Promotion/Advertising in the marketing mix of OYO

OYO prefers to promote via various social media sites such as Facebook, Twitter, Instagram, Pinterest, etc. With its exclusive offerings and reduced costs, Oyo uses the digital platform to draw new customers.
OYO organizes several online campaigns such as #AurKyaChahiye on youtube, #OneForEveryone contest, #OYOnauts, Father's Day Celebration campaign, etc.
Many of the promotions have featured artists from Bollywood to make them more appealing. Sonu Sood is the brand ambassador of OYO.

Brand Endorsement by Sonu Sood

Pricing in the marketing mix of OYO

The strategy of OYO Rooms is to attract customers with a lower room price than the hotel's base price.
The primary objective is to provide for an unequaled price that suits the user's budget. The room price varies depending on the location and luxury of the hotel, between Rs. 399 and Rs. 4000.
Overall Oyo Rooms follow a very sensible approach, aimed at providing rooms with outstanding facilities at a moderate rate and generating customer loyalty.

Place in the marketing mix of OYO

Oyo rooms work fully online where one can book the available hotels at an approximate cost either via an app or through online platforms.
Once booked with a confirmation one can avail of the service on reaching the booked hotel on a specific date.

People in the marketing mix of OYO

Oyo team comprises 17000 young and professional people who deliver maximum both for the company and individual growth.
With a dynamic team, Oyo provides excellent customer service, creates a positive experience for its customers, and in doing so markets its brand to them.

OYO Digital Marketing Strategies

OYO has shifted its business model from hotel aggregator to the fastest-growing chain of franchises offering OYO hotels (OYO flagships, townhouses, studio stays Collection O, Premium), living spaces (OYO Life), and workspaces (OYO Workspaces).

Marketing Approach Adopted by OYO Rooms

Prices in the real estate sectors are rising day-by-day still OYO has managed to provide the best places to people at an affordable price. The Internet brought the world closer and digital media became a huge marketing platform. In today’s digital and connected world, it is important to stay ahead of the competitor. OYO makes use of a 360-degree marketing strategy. OYO used all forms of digital as well as traditional media to reach its customers. Traditional media include both print and television whereas digital media include Google search ads, social media ads campaigns and OYO's own website and app.

Search Engine Optimization For OYO Rooms

Search Engine Optimization is done to ensure maximum traffic to the website by using particular keywords that have the highest searches from their customer. They understood their customer’s needs and intentions and updated their website accordingly. This ensured people searching for hotels would be redirected to their website.

OYO uses Facebook to share location-based posts, promotional posts, and posts related to the detailed progress of the organization. These posts helped people to browse destinations to travel, regular promotional posts provided customers with offers and discounts, encouraging them to book OYO.

OYO repost pictures taken by travelers and users of OYO on their Instagram handle. Along with this strategy they implemented Facebook marketing strategies to Instagram. This strategy leads to an engagement rate and encourages people to tag OYO in their posts.

OYO often works with influencers who create content around travel. This is either done via posts or re-posts. These posts are about the experience these influencers have during their vacations and not about the stay at OYO. The core idea of OYO's influencer marketing is that you will need a place to stay whenever you go out for a vacation and here comes influencers' experiences.

OYO tweet as well as retweet informative content such as award wins and events, news as well as companies' CSR activities which adds credibility to the brand in a not-so-obvious manner.

Conclusion

OYO is a well-established online portal for hotel bookings in India that can grow tremendously with the right digital marketing practices and the use of resources. The OYO marketing strategies put up in this article are for a better understanding of the reader. And, also to help the reader shape their ideas into creative campaigns that could be utilized in their business.

FAQs

What are OYO Rooms?

OYO Rooms is India's largest branded network of hotel chains offering standardized rooms to their customers at an affordable price.

How are OYO Rooms different from online travel agencies?

When you book OYO Rooms, you get a guaranteed OYO experience across all the hotels unlike an online travel agency or an online marketplace where end-user service is not standardized.

Does any payment need to be made at the time of booking?

Customers have the option to either make an advance payment or at the time of the hotel's check out.

I am a hotel owner. How can I partner with OYO?

In order to partner with Oyo Rooms, you have to visit partner.oyorooms.com and fill up a simple Oyo rooms registration form by stating your name, mobile number city and property type i.e home, commercial and hotel and click on become an Oyo to submit this form.

How much does OYO pay to the hotel owner?

OYO Rooms charges a commission of 22% from its hotel partners. However, this commission does vary according to the services provided by the brand.

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