The 21-year-old building India's largest hotel network

http://www.bbc.co.uk/news/business-34078529

by retube • 11 years ago

142 41 11 years ago

bbc.co.uk

drb311• 11 years ago

Clever way to bootstrap a franchise business. Nice work.

I've stayed in some really basic hotels in India. You get to choose between cheap and awful or expensive and decent. The bad places aren't always bad to keep costs low. Often the proprietors don't have the skills to run it any other way.

A lot of mom & pop businesses could benefit from this sort of approach.

nikant• 11 years ago

He succeeded because he solved a genuine problem. I have experienced the stay at the Hotels branded under OYO rooms. It is better in so many ways than other similar budget hotels.

awjr• 11 years ago

In the UK, you pretty much gamble whether an independent hotel, b&b, or holiday cottage has decent mattresses. There is less of an issue of quality of service but you really cannot tell how good the beds are.

littletimmy• 11 years ago

How is his age relevant? Would the task be less impressive if done by an 80 year old?

melling• 11 years ago

If you fall outside the norm then it's usually perceived as impressive. 18 and 80 would both be impressive.

In general, it's important to celebrate when people excel because the norm is a snarky comment on the Internet.

frgewut• 11 years ago

It's actually funny - BBC probably tried to convey a message that "age doesn't matter", but in tech circles this gets translated to "only a young person could achieve this".

carrotleads• 11 years ago

A valid problem this.. I have been in Agra and was pissed off at how simple stuff didn't work.. there seemed to be seemingly simple solutions but the hotel owners/managers either didn't know or it seemed too hard... Similar issues in the trip earlier in the year on a trip via Trivandrum in the southern State..

notahacker2• 11 years ago

Depends what your standards are. I stayed in a place in Agra with no windows and unusual plumbing, but on the other hand it was $3 per night. Was particularly amusing when people staying in 5 star accommodation nearby came to check out the view from the rooftop restaurant.

Judging from the link, what OYO is doing well is identifying hotels which are in a mid-range price bracket by local standards which can justify that charge on account of service comparable to a Western budget hotel rather than on account of "deluxe" features that push the price up despite elements of the service, power supply or plumbing.

sidm832• 11 years ago

What he has done, is standardize the experience in a hotel based on which category it fits (standard, premium, deluxe) and ensure you'll get a certain minimum standard of experience on your stay in any "OYO Room" across India. This is a huge problem in India especially at the lower end (sub $100). Also, what he has been very smart about is that his app/website provides the only interface with the hotel so you have to book it through OYO Rooms only, unlike other websites where you usually just discover hotels and book directly by calling/mailing the hotel itself.

mandeepj• 11 years ago

really?

I have never experienced this when booking through kayak, priceline, orbitz and numerous other sites

sidm832• 11 years ago

Yes, but this mainly holds true at the lower end of the pricing, starting from as low as INR 899 going upto a few thousand per day. He has managed to get such rates by aggregating a good number of guest houses which cost much less, which are otherwise out of the purview of typical hotel aggregators. The room detail page provides you a good description of what to expect in terms of feature list as well as realistic photographs, eliminating the "surprise" factor as much as possible. Instead of searching for a Hotel A/B/C when visiting a new city, you just book an "OYO Room" of your desired category in your desired location.

ericcholis• 11 years ago

I love that he didn't reinvent the wheel, he found a crappy wheel and sold it's owner on how to make it better. He put a price tag on things we all do when we find a service that could be improved.

kitd• 11 years ago

A bit OT but this stood out:

A similar idea - which eventually evolved into Oyo Rooms - won him a coveted Thiel Fellowship - a programme sponsored by PayPal co-creator and early Facebook investor Peter Thiel - which pays for 20 teenagers each year to stop studying and try to set up a business instead.

Someone tell me there are safeguards in place, because this just sounds like an award for dropping out. I assume there have to be assurances from the school/college that they can return to their studies later if business doesn't take off?

quadrature• 11 years ago

Thats kind of what Peter Thiel is all about, he doesn't believe in the current educational system.

Alot of the fellows do end up going back to school and they're all smart kids who wont have trouble returning to any university they wish to attend.

puranjay• 11 years ago

I would say being a Thiel fellow itself will make it easier for them to get into a top college.

That said, it is a bit ironic that Thiel is against the current educational system since he has undoubtedly benefited from it

trsohmers2• 11 years ago

It definitely isn't a lot... I can only think of 6 of the 60 fellows that have finished the program (Classes 2011 through 2013) that have gone back to school. Most if not successful get another job in the technology industry (or start another company). With the two new classes bringing it up to 100, I doubt there will be more than 20-25 that go back to school.

But yea, those that have chosen to go back to school have done much better than if they were to stay in school in the first place... Two of the 6 I was thinking of are now in PhD programs while they never finished undergrad.

notahacker2• 11 years ago

The Thiel fellowship debate certainly isn't new to this forum, but z very relevant aspect of that debate is how different the incentives look internationally.

My understanding is that in the US $100k over two years is equivalent to a comfortable middle class salary (outside SF, NY and perhaps one or two other places). It appears that in India it would be more like a exceptionally high salary placing someone in a top income bracket (except perhaps in Mumbai and one or two other places), an amount that would take several years to accumulate after getting a job at a prestigious multinational. The sort of sum someone with more modest expectations could even contemplate being a respectable retirement amount.

Keeping the amount equivalent internationally is perhaps only fair, especially since Thiel Fellows might look to relocate internationally to achieve their aspirations anyway, but it also means a sum proposed as a short term subsidy in the US represents actual wealth in some parts of the world.

sandGorgon• 11 years ago

There's an interesting article on the other side of the story -http://www.livemint.com/Companies/7CN7u5d4i3bfYgBAZLdLpM/Wil...

Radim• 11 years ago

TL;DR: article claims Ritesh lied about his "bestseller book", lied about his "Asian Science Camp invite", lied his way into an incubator, lied his way into the "Thiel Fellowship" programme.

And screwed a bunch of people on his way up.

Confident, assertive and charismatic, he always manages to come on top. In other words, a successful modern start-up artist.

Sven72• 11 years ago

Modern? Have you heard of Dhirubhai Ambani?

whitenoice• 11 years ago

Do people bluff numbers like that? seems strange that no one verified it. Especially getting a thiel fellowship.

w1ntermute3• 11 years ago

Oh, come on, he was just doing things that don't scale.

gautamnarula• 11 years ago

I hung out with Ritesh for a while two years ago when we were both finalists for the Thiel Fellowship. I found him very impressive even back then, and he was just a really genuine and nice guy. I'm happy to hear he and OYO are doing so well!

fdanconia• 11 years ago

I wonder how he is profitable or expecting to be profitable. The article states that Oyo pulls in roughly $3.5M/month but has to pay 1,500 employees.

jzwinck• 11 years ago

A couple grand a month is more than sufficient pay in many parts of India. Heck, it's enough for new police officers in New York City (ok, I'm ignoring payroll tax and insurance for this one).

sudhirj• 11 years ago

The average pay for hotel staff and call center operators is around Rs. 25,000 here, with junior pay starting at Rs. 15,000. That works out to less than $400 either way.

rgovind• 11 years ago

Out of 1500, I would say 1400 employees need to be paid around INR 10000 approx. This should equal about $200 per month per person. The rest would be better paid professionals like software programmmers, etc

callesgg• 11 years ago

look customer service is using ubuntu :)

hackuser• 11 years ago

I can see why hotels in India might have quality problems:

2,200 hotels operating in 100 cities across India ... and 1,500 employees.

... financed with ...

monthly revenues of $3.5m (£2.3m)

Revenues of ~$1,600/hotel/month? ~$2,300/employee/month? Am I misunderstanding something?

jpatokal• 11 years ago

Not necessarily. Average wage in India is Rs 3000/mo (~$44) and you can get a perfectly decent single room at a guesthouse for under Rs 500 ($7) -- although at this price range the quality of the room will be a total crapshoot, which is precisely why this is such a great idea.

On the other hand, if you want a 100% guaranteed Western branded hotel experience, you'll pay through the nose for it. Back when I was working in Delhi, 4-star-ish hotels charged $400/night and up and the Trident Hilton in Gurgaon was $700.

calbear81• 11 years ago

I was confused at first but I believe he meant to say that the Oyo cut is approximately $3.5m per month and the article states that they get a fee from all bookings similar to a franchise fee, etc.

bbanyc• 11 years ago

Similar to how Best Western and Quality Inns started as cooperatives of existing hotels some 70-80 years ago. Of course they just had paper directories and no centralized booking at the time.

thetruthseeker1• 11 years ago

I guess there are a host of problems that could be solved in India in a better way since it is still developing.

known• 11 years ago

You need Cash/Caste to succeed as an Entrepreneur in India;

https://en.wikipedia.org/wiki/Varna_in_Hinduism

The 21-year-old building India's largest hotel network

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