Indian OYO cuts losses and spend, transforms business model
Though OYO Rooms' losses in the year to end-Dec16 were down on $50 million in 2016 compared with $77 million, it still remains in the red. Does it have what it takes to succeed for its transformation?
OYO Rooms is still in the red, though losses in the year to end-Dec16 were down significantly on $50 million in 2016 compared with $77 million, according to an official blog post.
The India-based, Softbank-backed online budget hotel aggregator has raised a reported $200 million so far since its launch in 2013. It is the best funded of many similar businesses in India, giving budget hotels who agree to operate as a branded property access to property management technology, advice, training and a direct and third-party distribution platform.
The three months to the end of June this year were its best ever, allowing it to project that gross bookings for 2017 will come in at around $400 million from some 15 million room nights.
The blog post also reveals that 98% of OYO bookings are direct, which Gupta believes is the basis for a sustainable business model.
OYO is seeing a repeat customer rate of 45% and claims that it has nearly 100,000 “advocates” – defined as someone who has stayed with OYO at least five times in the past six months and made at least three bookings with the app.
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