Ritesh Agarwal was just 18 when he founded what is considered one of the world’s fastest-growing hotel chains. OYO is present in more than 500 cities across India, China, Malaysia, Nepal, the UK, UAE, Indonesia and the Philippines with more than 13,000 hotels under its belt. He talks to Click. about his road to success, and tips for hoteliers to boost guest satisfaction.
Click.: Why did you set up OYO?
Agarwal: I always aspired to pursue something different from the norm. During my travels, I realised there was a lack of standardised accommodation options. Finding quality accommodation at an affordable price was a huge challenge – but it inspired me to fill the gap. That’s how OYO started.
Initially, our objective was to create quality living spaces, introduce predictability for guests and empower hotel owners by giving them access to technology and improving their operations. In 2013, we started in one hotel in Gurgaon. Now we are the world’s fastest-growing chain of hotels, homes and living spaces. We are present in more than 500 cities and over 13,000 hotels across the world.
Click.: You stayed in over 100 guest houses and hotels before setting up OYO. What did this teach you about hotel management?
Agarwal: Customer satisfaction is at the core of a hospitality business. Service standards have to be exceptional. The experience that the property gives you – a memorable and comfortable stay – is what guests look for.
During my travels I worked different hotel roles. This helped me understand the problem faced by travellers – a predictable, standardised experience of quality accommodations at an affordable price – and think beyond the traditional mindset.
Click.: What has been your biggest achievement?
Agarwal: We have created more than 160,000 jobs across India and China alone. Every night, over 250,000 heads rest on a pillow in an OYO, testimony of the impact we are creating globally. These are still early days – OYO is only five-years-old – and we have more to achieve long-term.
Click.: What has been the hardest situation you have faced and how did you overcome it?
Agarwal: At the start, hotel owners were hesitant in associating with us given our entirely new and untested business model. But higher revenues, positive guest feedback and a jump in occupancy rates convinced them. For any business to thrive, you must recognise and overcome challenges associated with growth. Every overnight success is at least five years in the making.
Click.: What key attributes does a good leader need?
Agarwal: You must create an ecosystem of innovation by empowering people and making them partners in your success. At OYO, we encourage our employees to come up with their own ideas to scale up the business. A fair, transparent and open working environment helps create an entrepreneurial spirit.
Click.: OYO is expanding fast, aiming to be the world’s largest hotel chain by 2023. What approach will you take to achieve this?
Agarwal: Our business model involves going to unbranded hotel owners, signing franchise or lease agreements, then transforming them with our technology and operational expertise. We can increase occupancy rate by 20 to 30% by renovating living spaces in record time and sustaining demand. Customer experience is enhanced, and for hoteliers, there is higher occupancy leading to better financial returns.
Keep the customer lens on at all times. You have to get into their shoes to understand their problems in order to solve them efficiently
Our vision for our next wave of growth includes international expansion, investing in customer experience and focusing on long-term growth over short-term profit. Every month we are adding over 64,000 rooms globally to our portfolio. At this pace, we will achieve our goal by 2023.
Click.: What are your golden rules in business?
Agarwal: A successful business and leader needs three things – to identify a gap in the market, to continue against all odds, and to have the ability to execute ideas. Keep the customer lens on at all times. You have to get into their shoes to understand their problems in order to solve them efficiently. Repeat business and growth will then follow.
Click.: What has been the biggest lesson you’ve learnt?
Agarwal: Being mentored by legendary businessman Peter Thiel as part of the Thiel Fellowship programme taught me to work with people who share the same values and to trust the power of a unique idea, rather than trying to build an Indian version of a US or Chinese company. Success is a journey, not a destination. Challenge yourself. Set a benchmark, work hard to achieve it – then aim for something higher.
Click.: What other advice can you give hotel owners?Agarwal: Adopt innovative technology. Dynamic pricing and hotel management systems have radically changed both the guest experience and the hotel booking pattern. Technology can improve customer experience, operational efficiencies and thus boost occupancy and yields. But you must keep a customer-first approach.
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Hero image: credit to Josh Boot, Unsplash
- A good leader will create an ecosystem of innovation, by encouraging employees to generate ideas that will help grow the business
- Guests look for a memorable and comfortable stay. Service standards must be exceptional to achieve this
- Keep the customer lens on at all times. Get into guests’ shoes and you’ll be able to understand their problems and solve them efficiently. Repeat business and growth will then follow
- Adopting, and adapting to, new technology is key for a successful hospitality business. It can both improve customer experience and boost occupancy and yields