OYO Vs Airbnb - Biggest Hospitality Business Competitors in India

Abhishek Gupta Abhishek Gupta
Oct 13, 2021 11 min read
OYO Vs Airbnb - Biggest Hospitality Business Competitors in India

A traveller, a tourist and a first-time backpacker. These three have something in common despite their differences in experience. They all want a peaceful night to stay after having a long walk to someone's dream place or to a normal visit or a trip. The business of giving people home or a place to stay dates back to AD 707.

The hospitality business is one of the indestructible industries wherein famous chains have generations of families leading, in particular, the empire built by people through hospitality. Hotels are the face of this industry. There are buildings that provide people with a place to stay with the utmost comfort. They make people feel cosy in corners not owned by them, yet have rights over them.

The hotel industry was once owned by the owners with no regulatory bodies on the top of their heads. They had their own business model. But the new generation turned the system into a marketplace that involved filters of the various layers. The whole system was immediately converted into a well-oiled machine. A new system that sided with the huge Indian population.

This huge system turnover was brought by a 22-year-old Indian Boy named Ritesh Agarwal.

Current Status of Hotel and Tourism Industry
OYO Vs Airbnb - Experience in Industry
OYO Vs Airbnb - Front-end
OYO Vs Airbnb - Places to Stay
OYO Vs Airbnb - Stay Duration
OYO Vs Airbnb - Business Model
OYO Vs Airbnb - Revenue Model
OYO Vs Airbnb - Customer Relationship Management (CRM)
OYO Vs Airbnb - Marketing Strategy
OYO Vs Airbnb - Social Media
Conclusion
FAQs

Which is better - Airbnb or OYO?

Current Status of Hotel and Tourism Industry

The Tourism and Hotel Industry in India is one of the main drivers of growth among the services sector of the country. The tourism industry in India has significant potential as it has rich & diverse culture, historical heritage, a vast range of ecology, and flora and fauna. Indian is known for its geographical diversity, attractive beaches throughout the coastline, 27 world heritage sites, 10 biogeographic zones, 80 national parks and more than 441 sanctuaries.

According to reports, over 39 million jobs were created in the tourism sector which equates to over 8% of the total employment in India. By 2029, the countryโ€™s tourism sector is expected to grow 6.7% to reach $488 billion, which will account for 9.2% of the country total economy. The industry has slowed down due to the Covid-19 pandemic in 2020 and 2021, as the country had many lockdowns and restrictions on travel.

As per the Federation of Hotel & Restaurant Association of India (FHRAI), the Indian hotel industry had a loss of approximately $17.82 billion in revenue due to the ongoing pandemic. Despite taking a hit, the industry is looking to come back up with the help of schemes and opportunities provided by the government. The Indian Government is providing free loans to the MSMEs to help them deal with the crisis and revive the tourism sector.

It is also planning to tap into a staycation, which is an emerging trend where people stay at luxurious hotels to revive themselves of stress in a peaceful getaway. With many upcoming developments, the international tourist arrivals are expected to reach 30.5 billion and generate revenue of over $59 billion by 2028. OYO and Airbnb have in many ways helped the industry grow especially in 2020 and 2021, as domestic tourists are expected to drive the growth post-pandemic.

OYO Vs Airbnb - Experience in Industry

Ritesh Agarwal, Founder & CEO of OYO Rooms
Ritesh Agarwal, Founder & CEO of OYO Rooms

When it comes to trust, experienced companies are trusted more.

Ritesh Agarwal, the founder of OYO, formed the most famous chain of leased and franchised hotel chains. We Indians often refer to it as a place to look for the best deals for hotels, The Oyo Rooms. Oyo Rooms started 7 years ago with a bunch of hotels. The company has now expanded globally with thousands of hotels and vacation homes. Oyo Rooms was started in the year 2013.

Ritesh is the second youngest self-made billionaire in the world.

Airbnb's Founders
Airbnb's Founders

Airbnb was conceived years ago by two roommates who rented out an air mattress in their living room. This turned their whole apartment into a bed and breakfast. This was done to sustain the high-priced living in San Francisco. This gave the company its name Airbedandbreakfast. Airbnb was started in 2008.

So the winner here is, Airbnb, which has a lot of experience.

Both the companies share a common goal, i.e. to provide accommodations, a safe place and comfortable corners to people. Yet both the companies have a very different working business model.

Oyo is often believed to be India's answer to Airbnb. This article will take you through the different business models and things that are uncommon between the two companies.

OYO Vs Airbnb - Front-end

OYO Rooms
OYO Rooms

OYO, as people know, is a website where one can go through various filters and find a hotel. But this is the front-end of how the Oyo company is. Oyo is a marketplace for only hotels.

Airbnb
Airbnb

However, Airbnb is a marketplace that helps a traveller find an abode of his type. It can be for lodging, primarily homestays and homestays. It also lets the provider of the property fix a price. This helps both sides as well as Airbnb. The company has recently started offering experiences too.

This shows a more varied and real-world applied concept. So, Airbnb has a better front-end.

OYO Vs Airbnb - Places to Stay

OYO Online Booking
OYO Online Booking

Oyo used to get hotels and book a majority of the rooms for a definite time. It then standardizes the room according to the Oyo standards. Later, list the hotels on its website with huge and heavy discounts. The whole business model used to work by acquiring clusters of hotels for a definite time. Standardizing them and making them proper before listing.

Airbnb Online Booking
Airbnb Online Booking

Airbnb is based on the sharing economy. It makes owners share the property or rooms they own with travellers who in turn share money with the owners. It is believed to be the most successful business that works on sharing economy. A two-faced system that works for the public.

OYO Vs Airbnb - Stay Duration

Oyo works on hotel stays, so an individual can stay there for a good amount of time. Oyo rooms have no particular rule about leaving a room after a set date. The whole system is similar to how one can stay in a hotel. But in Airbnb, there is a 90-day rule. This rule was introduced in 2017. This rule is only for areas in London. The listings in that area cannot be occupied for more than 90 days.

This makes Airbnb not suitable for very long.

Oyo had 5,855 hotels in its network in the year 2016 with an inventory of over 68 thousand rooms. If compared to today it has a portfolio of more than 35 thousand hotels and 125 thousand vacation homes. It has over 1.2 million rooms across 80 countries and 800 cities.

But, the founder and CEO of Oyo - Ritesh Agarwal made an announcement in the year 2017 that the company had evolved its Oyo business model to 100% franchise, managing, or operating. He also mentioned that his company would no longer go for hotel aggregation and will shift towards becoming a proper full-scale hospitality company. The CEO stated that this change in business model will reduce operational costs. Hence, improve service.


OYO sets foot in UAE after China
Indiaโ€™s largest hospitality firm, OYO is on an expansion spree after launchingits operations in 350 cities across India, Nepal and Malaysia. The latestoperations embarked by OYO is in UAE hospitality space. It has secured over 10full-inventory franchised and operated hotels comprising of 1100 rooโ€ฆ

OYO Vs Airbnb - Business Model

Oyo changed its business model to the Franchise model in the year 2017. The company earlier used to take up some rooms on lease and would sell them to customers. This model involves partnering with many hotels and asking them to operate as a franchise. Then selling their rooms to all the customers at competitive prices.

Airbnb, known for not owning any of the properties. Yet known for having a business that does work on providing shelter. All the company does is providing a platform. A platform on which all the people can rent out properties they own or spare rooms to guests. The property prices are set by the owner themselves. But the company intervenes when it comes to the collection of money.

The Business model of Airbnb is a multi-sided marketplace that connects all the travellers with the host and experience providers. The company makes money from the fees that come from bookings from stays and experiences. Airbnb's model is exponential when it comes to growth.

Airbnb has a better business model in terms of customer comfort and reach.

Airbnb's business model is quite simple yet very innovative which often dubs it as the world's fastest-growing travel site.


The current insights and challenges of OYO Rooms
Almost 8 years ago, while travelling through the country, a college dropoutspotted the untouched opportunity in organising Indiaโ€™s budget hotels. This yearhis startup [https://startuptalky.com/tag/startup/] has achieved 3.5x growth inrevenue with a current value of $10 Billion dollars. Itโ€™s easy โ€ฆ

OYO Vs Airbnb - Revenue Model

Oyo charges around 22% of commissions. This has to be paid every month by the hotels' owners. However, commissions may vary as per the services and features offered. Oyo also charges a commission out of the room reservation fee according to their services chosen.

Airbnb makes all the money through commissions. It charges a 3% commission on every booking from hosts and between 6 - 12% from guests. Unlike Oyo, Airbnb takes reviews and feedback from both ends. Be it the host or the guest, this makes it a proper marketplace.

Airbnb seems to have an upper hand at everything, making it a proper place to visit before actually vising one.


My Suggestions to OYO Rooms
Oyo is doing great. According to one of my friends who works at oyo, its hotel segment is profitable too. Well, here are present you few things which I think will help to make a better OYO!

OYO Vs Airbnb - Customer Relationship Management (CRM)

Customer Relationship Management (CRM) is a tool that lets a company store customer and prospect contact information. It also helps the company identify sales opportunities, record service issues, and manage marketing campaigns. Depending on what type of CRM a company as they can get basic information about their prospective customer and interact with them. CRM helps the company in better analyzing and understanding their customers, which will help them offer better and more efficient customer service. Airbnb and OYO have very different CRM strategies.

CRM of OYO

The CRM that OYO uses is Blueshifts Programmatic CRM, which has helped the company to become a leader in 1:1 customer engagement across all marketing channels. With Blueshift's precise recommendations and targeted triggers, OYO has been able to achieve 5X higher bookings from email and mobile channels. The company also has a mobile-first approach which has helped it to expand in over 500 cities across ten countries.

CRM of Airbnb

The CRM that Airbnb uses is Twilio, which helps connect with hosts. How it works is, when a traveller makes a reservation through Airbnb, the host has 32 hours to respond to a booking request and this is possible because of its CRM. There is systematic mobile communication between hosts and travellers using a text message. The host can also decide whether they want to accept or deny the customer. The company also uses Hootsuite social media management, which helps them monitor their followerโ€™s growth and social CRM. The system also helps the company to find certain keywords that can eventually be used in campaigns.

OYO Vs Airbnb - Marketing Strategy

OYO - Marketing Strategy

Oyo is known to use the 360-degree marketing method as it implies having a presence on all forms of digital and traditional media. They also have their unique room strategy which helps in attracting more customers with lower room prices in comparison to the base price of the hotel. Besides that OYO has made many successful multimedia marketing campaigns such as #AurKyaChahiye. It also shares location-based posts, promotional posts, which helps people to browse destinations to travel, check for new offers & discounts and encourage them to book OYO.

Airbnb - Marketing Strategy

Airbnb on the other hand uses the marketing approach to building and maintaining a strong community among its users. It also mainly targets long term loyalty from both the guests and hosts. The main marketing strategy of the company is to take your business in front of your potential guest and turn them into bookers. The customers who previously enjoyed their stay with Airbnb places are sent an email encouraging them to list their own property. Airbnb India aims to make its guests feel welcome, its app did the same, as it has a unified interface on Android and iOS platforms.

OYO Vs Airbnb - Social Media

OYO on Social Media

Over the years the company has leveraged the power of social media as it has been able to retain its ranking and stay ahead of OYO competitors in the market. OYO currently has over 169k followers on Instagram and 65.4k followers on Twitter, with actor Sonu Sood as its current brand ambassador. On all the social media platforms, the company promotes itself as being a brand that offers two types of services which are promoting tourist spaces and a safe space to spend time with your loved ones in your own city. OYO also uploads many ad campaigns like โ€˜Fir Badhega Indiaโ€™ and โ€˜Sanitised Staysโ€™ that helps in engaging with their customers especially during the COVID-19 pandemic.

Airbnb on Social Media

Airbnb has a different approach to social media marketing as it heavily relies on awareness generating strategy. The company also uses travel influencers to further promote the platform as it does its social media relies on user-generated content (UGC). So far the company has over 4.9 million followers on Instagram and 733k followers on Twitter. It also has over 6.3 million photos using #airbnb on Instagram which shows us how widespread the company is. Airbnb also heavily invests in video marketing as a part of telling its brand story, it currently has more than 500 videos generating over 100 million views on YouTube.

Conclusion

In a nutshell, Airbnb and Oyo share the same kind of services, i.e. hospitality service. Moreover, Airbnb is a website for people to list, find and rent lodging whereas Oyo is a chain of budget and premium rooms partnering with different hotels. Oyo is all about providing a customer experience within a stipulated budget range while Airbnb doesn't control the customer experience as such.

FAQs

What is the difference between Airbnb and Oyo?

OYO has more hotel rooms whereas Airbnb has more residential plots. In Airbnb, the apartment may have been misinterpreted, not so in the case of OYO as an audit is done every week.

Are OYO Rooms similar to Airbnb?

OYO's business model is kind of similar to that of Airbnb, i.e. they are an online aggregator of budget hotels. Bookings for these rooms would be made via the website and the mobile app of OYO Rooms. However, the main focus is always is the quality of service provided.

How to give your property to OYO Rooms?

For OYO Rooms registration, you can write an email to partner@oyorooms.com or give a call to this number +91 70530 70530.

Is OYO successful?

OYO Rooms has been one of the most successful startups in India being the country's largest budget hotel chain. It focuses on standardizing the hotels in the non-branded hospitality sector.

Is Airbnb better than Oyo?

OYO is better in terms of privacy and security. OYO assures quality service while Airbnb doesn't guarantee anything from their end.

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