Is The OYO Business Model different From Airbnb Business Model?

Abhishek Gupta Abhishek Gupta
Mar 14, 2021 7 min read
Is The OYO Business Model different From Airbnb Business Model?

Start your stock and bitcoin trading and win rewards! Signup now at

A traveler, 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 evergreen ones. Famous chains have generations of their family leading the place. Such is the empire built by people through hospitality. Hotels are the face of this industry. They are buildings that provide people a place to stay with the utmost comfort. They make people feel cozy 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 market place that. A marketplace that involved filters of various layer. 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 an 22 year old Indian Boy named Ritesh Agarwal.


Ritesh Agarwal, Group CEO of OYO Rooms
Ritesh Agarwal, Group CEO of OYO Rooms

Who's More experienced Oyo or Airbnb?
What's The Front-End of Oyo And Airbnb Like?
How Oyo And Airbnb Lists Places to Stay?
Oyo And Airbnb On Time of Stay
Oyo Business Model vs Airbnb Business Model
Oyo Revenue Model vs Airbnb Revenue Model

Who's More experienced Oyo or Airbnb?

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

Ritesh Agarwal formed  the most famous chain of leased and franchised Hotel chain. We Indians often refer it to as a place to look for 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 was conceived years ago by two room mates who rented 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, safe places, 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.

What's The Front-End of Oyo And Airbnb Like?

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

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

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


OYO Rooms
OYO Rooms

How Oyo And Airbnb Lists Places to Stay?

Oyo earlier used to get to hotels and would book a majority of the rooms for a definite time. It would then standardize the room according to the Oyo standards. Later to 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, making them proper before listing.

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

Oyo And Airbnb On Time of Stay

Oyo works on hotel stays, so any individual can stay there for any amount of time. Oyo rooms has no particular rule about leaving a room after  a set date. The whole system similar to how one can stay in a hotel. But in Airbnb there is 90-day rule. This rule was introduced in 2017. This rule is only for area 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 a  inventory of over 68 thousands rooms. If compared to today it has a portfolio of more than 35 thousand hotels and 125 thousands vacation homes. It has over 1.2 Million rooms across 80 countries and 800 cities.


OYO sets foot in UAE after China
India’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 roo…

But, Oyo CEO Ritesh Agarwal made an announcement in the year 2017 . He said 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. He said that Oyo will shift towards becoming a proper full-scale hospitality company. The CEO, stated that this change in business model will reduce the operational costs. This would also improve service.

Oyo Business Model vs Airbnb Business Model

Oyo changed its business model to 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 collection of money.

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

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


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 India’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. It’s easy …

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


Airbnb
Airbnb

Oyo Revenue Model vs Airbnb Revenue Model

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

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


Top Entrepreneurs of India | Successful Indian Entrepreneurs
Indians are fixated on the startup culture. People are choosing entrepreneurshipover mundane, 9-to-5 jobs. However, not everyone succeeds as an entrepreneur. Asurvey revealed that approximately 11% of the Indians are engaged in‘early-stage entrepreneurial activities’. And only 5% of these early-s…

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 case of OYO as an audit is done every week.

Is OYO Rooms similar to Airbnb?

Oyo business model is kind of similar to that of Airbnb or Uber 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 also Write an Email to partner@oyorooms.com and Give a call on this number +91 70530 70530.

Is Oyo rooms profitable?

Yes

Must have tools for startups - Recommended by StartupTalky

Subscribe to Startup Talky

Get the latest posts delivered to you right in your inbox

Great! Next, complete checkout for full access to StartupTalky.
Welcome back! You've successfully signed in.
You've successfully subscribed to StartupTalky.
Success! Your account is fully activated, you now have access to all content.
Success! Your billing info has been updated.
Your billing was not updated.