OYO is revolutionizing the budget hotel industry, but at what cost?
OYO Rooms is the largest branded network of budget hotels currently operating 12,000 hotels in 337 cities in India, Malaysia, UAE, Nepal, China and Indonesia. The company have pretty much proved skeptics wrong with its rapid expansion and is currently the biggest hospitality company in India.
That being said, The company’s Summer Booking Index index recently revealed that in Malaysia, an OYO was booked every 10.79 seconds. While that is impressive, is it really that surprising given that they market heavily towards young unmarried couples who pretty much just want to ****? We should never underestimate the urgency of young “love”, but i digress.
Franchising isn’t easy
To get back on point, while this may be great for the company, it is also rather concerning news. The fact of the matter is, OYO’s rapid global expansion has come at a heavy cost. Franchising is tough and requires clear standards and strong discipline. Unfortunately, there are enough anecdotes around to suggest OYO’s management may be struggling to keep its house in order among franchisees while maintaining their focus on adding more.
A prime example of this happened just last year in September. A four-day harassment ordeal recounted by Jordan Taylor, a vlogger who publishes under the name Travellight. In the 18-minute video she recounted the ordeal in detail. The interesting thing about this is that it was only after she exposed to the world that hotel staff attempted to enter her room, turned off the air conditioner and made sexually suggestive calls that OYO shut down its connection with the franchisee. In another case, a woman was reportedly raped by a manager at an OYO franchise hotel in Gurgaon, outside Delhi.
Less expanding, more policing
While these are isolated incidents that represent a small sample of all stays at OYO properties and there has yet to be an instance of anything like this happening in Malaysia, it is indicative of where the company’s priorities lie. It’s like as if they’re suffering from tunnel vision from their fixation on becoming the biggest hotel chain in the world that they’ve completely disregarded quality and customer safety.
The whole OYO model is based on the claim that it brings hotels up to standard so that you can trust any outfit bearing the OYO name. Its $5 billion value was built by promising consistency. That means each franchised hotel on the network lives and dies by the reputation of the collective.
Perhaps they need to spend less time expanding and more time policing? Just some food for thought.
