In 2016 when Airbnb entered India, OYO had already created a monopoly
4 years and an EPIC battle later, Airbnb emerged as the winner
Here's how Airbnb defeated OYO in India:
4 years and an EPIC battle later, Airbnb emerged as the winner
Here's how Airbnb defeated OYO in India:
Airbnb started in 2008 when two roommates put an air mattress in their living room and rented it out.
They later decided to scale the idea and gave the co. its name: Air Bed and Breakfast.
OYO was brought to life in 2013 by a college dropout giving Airbnb a headstart of 5 yrs.
They later decided to scale the idea and gave the co. its name: Air Bed and Breakfast.
OYO was brought to life in 2013 by a college dropout giving Airbnb a headstart of 5 yrs.
Airbnb and OYO are both giants in the hospitality industry and competitive threats to hotels.
On the surface, they both appear to be very similar — providing accommodation to guests.
However, Airbnb has a slight upper hand over OYO. Let’s understand why this is the case.
On the surface, they both appear to be very similar — providing accommodation to guests.
However, Airbnb has a slight upper hand over OYO. Let’s understand why this is the case.
👉 THE CUSTOMERS
Airbnb has an aggregator business model. It provides a platform for property owners to rent their homes or a part of their house to interested guests,
whereas OYO has a pure franchise model. It partners with hotels and sells accommodation to visitors.
Airbnb has an aggregator business model. It provides a platform for property owners to rent their homes or a part of their house to interested guests,
whereas OYO has a pure franchise model. It partners with hotels and sells accommodation to visitors.
For Airbnb, the actual customer is the property owner, and it primarily focuses on the satisfaction of the hosts.
It provides amazing protection to the hosts against liabilities, damage, pet damage, deep cleaning, income loss, and more.
It provides amazing protection to the hosts against liabilities, damage, pet damage, deep cleaning, income loss, and more.
Hosts can build a local community of hosts — Local Host Club — to organise meet-ups, exchange hosting advice, and learn from each other's best practices.
Airbnb also gives them the freedom to control the price of their property.
Airbnb also gives them the freedom to control the price of their property.
Hosts can even increase prices based on better reviews.
Hence, the host always goes the extra mile for the guests to have a top-notch experience.
Moreover, visitors can choose from a wide array of options — from shared rooms to private islands.
Hence, the host always goes the extra mile for the guests to have a top-notch experience.
Moreover, visitors can choose from a wide array of options — from shared rooms to private islands.
This leads to high customer satisfaction, resulting in a stronger brand image for Airbnb.
Now, in the case of OYO, the visitors are its customers.
But partner hotels rarely take charge of making customers extremely happy because they don’t have control over rates.
Now, in the case of OYO, the visitors are its customers.
But partner hotels rarely take charge of making customers extremely happy because they don’t have control over rates.
Instead, they’re at the mercy of OYO, who charges high commissions from them.
👉 EXPANSION STRATEGY
OYO has aggressively extended its presence to over 500 cities with 18000+ hotels and 270,000+ rooms in India.
👉 EXPANSION STRATEGY
OYO has aggressively extended its presence to over 500 cities with 18000+ hotels and 270,000+ rooms in India.
There's an OYO in almost every corner of the city. Almost as if there are more OYO Rooms than tea stalls.
Airbnb is present in over 120 cities in India and has 70,000 listings in India.
Airbnb is present in over 120 cities in India and has 70,000 listings in India.
Simply put, Airbnb is rare, and it needs to grow faster. So, Airbnb invested $200 million in OYO in 2019.
This gave Airbnb access to 10,000 OYO Home properties and an instant boost in the market.
This gave Airbnb access to 10,000 OYO Home properties and an instant boost in the market.
But OYO’s narrative is a bit stained since they are easier to find at low prices and are considered a hotspot for hookups.
On the other hand, Airbnb has a premium feel attached to its narrative. For example, it facilitates a cultural exchange between travellers and hosts.
On the other hand, Airbnb has a premium feel attached to its narrative. For example, it facilitates a cultural exchange between travellers and hosts.
👉 QUALITY OF EXPERIENCE
Airbnb is meticulous when it comes to being perfect in every aspect. This reflects in their care for the customer’s comfort.
An Airbnb might not have a beautiful interior or situated in a prime location, but it's kept clean, and the hosts are friendly.
Airbnb is meticulous when it comes to being perfect in every aspect. This reflects in their care for the customer’s comfort.
An Airbnb might not have a beautiful interior or situated in a prime location, but it's kept clean, and the hosts are friendly.
Cleanliness and friendliness are the two most important things a guest looks for while booking, and Airbnb stays true to its word.
On the other hand, OYO seems quite absent-minded in this matter, and its customer experience is compromised.
On the other hand, OYO seems quite absent-minded in this matter, and its customer experience is compromised.
Property owners don’t go above and beyond since they aren’t incentivized well.
Even the staff runs the hotel without a sense of ownership and responsibility.
And though it might be well-built, efforts diminish, and basic amenities aren’t taken care of once onboarded as an OYO.
Even the staff runs the hotel without a sense of ownership and responsibility.
And though it might be well-built, efforts diminish, and basic amenities aren’t taken care of once onboarded as an OYO.
Customers have regularly provided feedback and reported lots of horrible experiences such as,
broken ACs, dirty bedsheets, unclean washrooms, and ill-mannered hotel staff.
But most of these cases usually remain unresolved — leading to poor customer service and satisfaction.
broken ACs, dirty bedsheets, unclean washrooms, and ill-mannered hotel staff.
But most of these cases usually remain unresolved — leading to poor customer service and satisfaction.
And this puts OYO in deep trouble when competing with Airbnb, which has created immense value through its product.
Not addressing these shortcomings is probably the reason why OYO still hasn't been able to see the face of profits.
Not addressing these shortcomings is probably the reason why OYO still hasn't been able to see the face of profits.
Don’t get us wrong here. OYO has recovered well after the pandemic and might turn the tables soon!
OYO’s business model is just as solid.
When Airbnb invested in OYO, it wasn’t just for expansion — they actually believed in its business.
OYO’s business model is just as solid.
When Airbnb invested in OYO, it wasn’t just for expansion — they actually believed in its business.
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