How Indian tech start-up OYO is changing face of Malaysian budget hotels

The OYO 168 Aira Hotel at Jalan Raja Laut, Kuala Lumpur. — Picture courtesy of OYO
The OYO 168 Aira Hotel at Jalan Raja Laut, Kuala Lumpur. — Picture courtesy of OYO

PETALING JAYA, July 11 — Own a budget hotel but not quite sure how to grow the business to its fullest potential?

Indian tech start-up OYO works with budget hotels that are not under any single large brand and helps transform these properties into quality living spaces by equipping hotel owners with a tech platform to ease operations and increase room sales.

OYO arrived in Malaysia just under a year ago, its first overseas outpost outside of India.

Founded five years ago by Ritesh Agarwal, OYO has since ventured into China, Nepal and Indonesia and is looking to expand into Vietnam, Thailand and the Philippines next.

The brand now has more than 120 hotels in Malaysia at locations such as Bukit Bintang, Chow Kit, Cheras, Pudu and Masjid India in Kuala Lumpur.

“When you look at hotels, more than 60 per cent of the supply is made up of these fragmented budget hotels,” OYO chief operating officer Abhinav Sinha told Malay Mail.

“They’re structurally similar to what we saw in India and we are solving problems for these types of assets.”

The type of property that OYO strikes up exclusive partnerships with are usually standalone properties with 30 to 45 rooms, run by individual hotel owners who might not have the right tools and technology needed to run a hotel.

“A lot of these hotel owners are rich, they want to invest money but they don’t know what to do,” he said.

OYO Malaysia country head Abhishek Hota (left) and OYO COO Abhinav Sinha. — Picture by Mukhriz Hazim
OYO Malaysia country head Abhishek Hota (left) and OYO COO Abhinav Sinha. — Picture by Mukhriz Hazim

Sinha explained that incorporating the OYO brand into these stand-alone establishments not only helps owners run a better show but fosters trust in the budget hotel industry.

“There is a brand behind taking accountability of not only improving the infrastructure but also training the staff and maintaining an upkeep of the property on a day to day basis.

“We can do that at that scale because we are a technology-first company,” he said.

From property makeovers done by a team of architects and space designers to OYO Captains who are on the ground to personally answer local queries, Sinha said the brand aims to be at the forefront of the fulfilment business through technology.

The tech company also employs artificial intelligence which drives an algorithm to rate photographs on the platform for more than 8,500 hotels in its global network.

Malaysia was selected as OYO’s first international market for several reasons.

“Malaysia is one of the fastest tourism economies in the world, not just in South-east Asia, and coupled with a large fragmented supply — that is super exciting.

“Looking at Kuala Lumpur specifically, the size of the market is very attractive and as a multilingual market, there’s great access to talent,” he said.

Malaysia’s business-friendly rules and regulations was another pull factor.

All OYO hotel rooms undergo a makeover as part of the exclusive partnership. —  Picture courtesy of OYO
All OYO hotel rooms undergo a makeover as part of the exclusive partnership. — Picture courtesy of OYO

With plans to expand into Penang, Malacca, Johor and Kota Kinabalu as part of OYO’s ambitious 20x growth target for its hotels in the next 12 to 15 months, Sinha said the recent abolishment of the goods and services tax (GST) could not have come at a more perfect time.

“It’s a big boost for the ecosystem. For an end customer, it’s only six per cent but that six per cent being distributed within the trade makes the business community happier,” he said, adding that in India, 600 hotels are added into the OYO portfolio each month.

Sinha believes OYO’s mission to create quality living spaces for customers without hurting their pockets will have a huge impact on the Malaysian hospitality industry.

“Consumers want great price, great location and great quality but the problem is one of this always broken and we are trying to build a better equilibrium,” he said.

Sinha pointed out that Malaysians are quick adaptors of new technology, especially smartphone-based interfaces.

“They are looking for the simplification of the entire process and ease of use. OYO has a high density of hotels and our app offers a simple three-touch process to make a booking,” he explained.

When it comes to customer service, Sinha observed that Malaysians have a high inclination to do well.

“People are warmer and more hospitable. Combining that will and intent with our tools, it delivers a superior service,” said Sinha.

Find out more here.

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