OYO India has witnessed a 3.5x revenue growth, reporting an operating revenue of Rs 416 crore in 2017-18, compared to Rs 120 crore reported for FY 2016-17. The revenue growth has been driven by strong underlying business drivers notably increase in exclusive room supply, two times increase in stayed room nights and consistent margin expansion.
Partnering with OYO significantly improves the quality of the standalone hotel and improves occupancy from 25 per cent to 65 per cent on an average, increasing the yield on underutilized assets for asset owners. The growth trend continues in FY 2018-19 with revenue estimates of Rs 1,400 crore+.
The robust business model with limited marketing spend generates double-digit positive contribution margins. OYO continues to invest in technology and build long term capabilities while getting onboard the top talent in the country. Margin expansion and a high degree of operating leverage in the business model has resulted in more than 50% improvement in economics with the losses as a % of realised value coming down from 44.5% in FY 2016-17 to 20.3% in FY 2017-18. In FY 2018-19, OYO estimates further improvement in the economics of close to 50%, with losses going to down to 10.4% (Estimates).
OYO’s capabilities are moats that allow it to stay true to its mission of creating quality living spaces.
93 per + of OYO’s demand comes through its own channels signifying low dependence on 3rd party online travel agents (OTAs). Repeat customers for OYO generated 73% of revenue in Q4 2018 (Oct-Dec) bringing in an industry leading metric. This can be attributed to a seamless product experience, efficient operations, and solid distribution capabilities.