The Taj chain’s The Pierre Hotel in New York might witness a change of ownership. Essam Khashoggi, a Saudi billionaire, and the Sultan of Brunei have both indicated interest in paying $2 billion to purchase the famous Manhattan estate. After managing the Pierre for almost 20 years, Taj might leave if the deal is finalised.
As a result, Taj will only have one property in the US: San Francisco’s Taj Campton Place. Taj’s website states that it purchased The Pierre in 2005 and made it its flagship property in North America. Four years later, the upscale hotel underwent a $100 million restoration.
United Overseas Holding (UOH), a 100% subsidiary of Indian Hotels (IHCL), a Mumbai-listed company that owns the Taj chain and is a member of the $165 billion Tata Group, is the parent company of the hotels in New York and San Francisco. According to business reports, IHCL invested INR 2,324 crore in stock in UOH in FY25. But throughout that time, UOH claimed to have lost INR 82 crore.
Taj Put Up The Pierre Hotel for Sale Last Year
After deteriorating into a “less-than-ideal” state, the 189-room, restaurant and luxury apartment complex known as The Pierre was listed for sale last year. Owners of apartments are also the property’s stockholders.
Among them are prominent figures such as former Disney CEO Michael Eisner, Princess Firyal of Jordan, fashion designer Tory Burch, and US Commerce Secretary and trade negotiator for President Donald Trump Howard Lutnick, who owns a penthouse.
Exit Might Scale Down Taj’s International Footprints
The departure would signal a reduction in Taj’s global presence if the purchase closes. At the July AGM, IHCL chairman N Chandrasekaran recently informed shareholders that the company had no ambitions to expand aggressively abroad. According to him, the group is not considering every international market when it comes to international expansion.
It will take into account city-specific prospects in regions like South Africa, Africa, and New Zealand, but it will not seek extensive international expansion. In FY25, IHCL’s overseas hotels brought in around INR 1,512 crore in revenue and made Rs 202 crore in operating profit. According to NYT, Taj has defended its property management and suggested improvements that wouldn’t force the occupants to vacate. The Pierre’s board is in the last phases of the selling discussions, the NYT report further mentioned.
Quick
Shots
•Saudi billionaire Essam Khashoggi and
the Sultan of Brunei show interest in buying the property.
•Taj acquired The Pierre in 2005;
underwent $100 million renovation in 2009.
•If sold, Taj’s only U.S. property
will be Taj Campton Place in San Francisco.
•Parent company United Overseas
Holding (UOH) reported INR 82 crore loss in FY25, despite INR 2,324 crore
infusion.
OYO Rooms, also known as OYO Hotels & Homes is the third-largest hospitality chain by room count providing a comfortable room stay and ensuring the acceptability of the services by the OYO’s customers in more than 80 nations. Incorporated in 2013 by Ritesh Agarwal (one of the youngest Indian entrepreneurs, the founder and CEO of OYO Rooms) it has established itself as the fastest-growing network of hotels offline and online.
Headquartered in Gurgaon, it has expanded its reach worldwide within the span of 10 years and has employed over 17,000 employees globally. However, this is not the only reason why OYO has recorded such a huge success. Its excellent marketing strategy shows that it continues to be a leading hotel chain.
Ritesh Agarwal started his journey at the age of 17 and is considered to be one of the youngest CEOs in India. In 2011, Ritesh moved to Delhi with the intention of starting his own business. Soon, he started traveling extensively across India and stayed in PGs or budget hotels. These unpleasant traveling and stay experiences led him to launch Oravel Stays in 2012.
Ritesh has been one of the judges in Shark Tank India since Season 3.
Ritesh Agarwal – Founder & CEO, OYO Rooms
Oravel to OYO Rooms
Oravel Stays Pvt.Ltd was Ritesh’s first startup. Oravel was designed to enable the listing and booking of budget and premium accommodations.
It was meant to be a destination for short and midterm rentals for bed and breakfast joints, private rooms, and serviced apartments.
Oravel was then transformed into OYO Rooms in 2013 when Agrawal realized that a combination of bed and dinner was not sufficient. He proposed to make it an affordable and standardized accommodation.
OYO rooms are India’s largest branded network of budget hotel chains. It currently operates across 400 Indian cities including major metros, regional hubs, leisure destinations, and pilgrimage towns, and was valued at $9.6 billion in 2022.
They offer the hotels to their clients and retain a proportion of the profits.
OYO Rooms is a budget hotel aggregator in India. In order to standardize different measures in each room, OYO Rooms partners up with hotels, including free wifi and breakfast, flat-screen televisions, spotless white bed linens, toiletries with a brand name, 6-inch showerheads, drinking cups, etc.
OYO uses a mix of demographic, geographic, and psychographic segmentation strategies to understand the changing needs of the customers in the competitive market. OYO segments the market in the following manner:-
OYO Townhouse targets Millennial travelers
OYO SilverKey caters to the needs of corporate travelers
OYO Vacation Homes targets people who come on vacation at the beach or a villa on an exotic island
OYO Life provides residential space
Targeting strategy is the cornerstone of the product development process. OYO uses a differentiated targeting business strategy for different product categories.
Corporate tie-ups for airline travelers
Tours and travels
College students or working professionals who are in search of fully managed homes on long-term rentals at an affordable price
OYO uses a value-based positioning strategy for its customer by providing:-
Standardized budget hotels
Luxurious productive place
Open grass greenery
Better room service
Marketing Mix of OYO Rooms
As OYO Rooms concentrate on co-branding, they operate differently from OTAs (Online Travel Agency). They state that they are working with zero-to-2-star hotels and guest houses, ‘standardizing’ them and getting them customers through their website and apps. Usually, other hotel aggregators simply connect the customer with the hotel by listing hotels on their website and taking a commission as their revenue. They would work out a deal with the hotels with a minimum order guarantee per month and are able to provide discounted rates and deals on the room rates compared to the rates provided by the hotels directly to a normal guest.
OYO’s market coverage has swiftly increased because of being listed with travel aggregators like MakeMyTrip, clear trip, and hotels.com. Their aim is to target small business travelers and budget tourists to eminently swift-cash and that works in favor of OYO because revenue gets realized quicker too.
Product in the Marketing Mix of OYO
Oyo has a wide range of products and services that they offer to their customer as per their need. OYO Rooms, OYO Hotels & Homes has a multi-brand approach. These include:
OYO Townhouse
OYO Home
OYO Vacation Homes
SilverKey
Capital O
Palette
Collection O
OYO LIFE
YO! HELP
Promotion/Advertising in the Marketing Mix of OYO
OYO prefers to promote via various social media sites such as Facebook, Twitter, Instagram, Pinterest, etc. With its exclusive offerings and reduced costs, OYO uses the digital platform to draw new customers.
OYO organizes several online campaigns such as #AurKyaChahiye on YouTube, #OneForEveryone contest, #OYOnauts, Father’s Day Celebration campaign, etc.
Many of the promotions have featured artists from Bollywood to make them more appealing. Sonu Sood is the brand ambassador of OYO.
Brand Endorsement by Sonu Sood
Pricing in the Marketing Mix of OYO
The strategy of OYO Rooms is to attract customers with a lower room price than the hotel’s base price.
The primary objective is to provide an unequaled price that suits the user’s budget. The room price varies depending on the location and luxury of the hotel, between Rs. 399 and Rs. 4000.
Overall OYO Rooms follows a very sensible approach, aimed at providing rooms with outstanding facilities at a moderate rate and generating customer loyalty.
Place in the Marketing Mix of OYO
Oyo rooms work fully online where one can book the available hotels at an approximate cost either via an app or through online platforms.
Once booked with a confirmation one can avail of the service on reaching the booked hotel on a specific date.
OYO Rooms Online Booking
People in the Marketing Mix of OYO
Oyo team comprises 25000 young and professional people who deliver maximum both for the company and individual growth.
With a dynamic team, OYO provides excellent customer service, creates a positive experience for its customers, and in doing so markets its brand to them.
OYO started with traditional marketing to make people aware of its brand. It used billboards, TV ads, print media, flyers, and even taxi ads, especially in cities and tourist areas. These methods helped OYO reach travelers who were not very active online.
OYO Billboard
OYO also focused on local marketing by working with travel agents and sponsoring events. This helped build trust and made OYO a familiar name among different types of travelers. However, while billboards and ads caught people’s attention, they couldn’t engage customers like digital marketing. That’s why OYO later shifted to online marketing, using social media and personalized ads to connect with more people in a better way.
OYO Digital Marketing Strategy
OYO has shifted its business model from hotel aggregator to the fastest-growing chain of franchises offering OYO hotels (OYO flagships, townhouses, studio stays Collection O, Premium), living spaces (OYO Life), and workspaces (OYO Workspaces).
Marketing Approach Adopted by OYO Rooms
Prices in the real estate sectors are rising day-by-day still OYO has managed to provide the best places to people at an affordable price. The Internet brought the world closer and digital media became a huge marketing platform. In today’s digital and connected world, it is important to stay ahead of the competitors. OYO makes use of a 360-degree marketing strategy. OYO used all forms of digital as well as traditional media to reach its customers. Traditional media include both print and television whereas digital media include Google search ads, social media ads campaigns, and OYO’s own website and app.
Assi Reach Gaye? | OYO Rooms Official | Roadtrip
Search Engine Optimization For OYO Rooms
Search Engine Optimization is done to ensure maximum traffic to the website by using particular keywords that have the highest searches from their customer. They understood their customer’s needs and intentions and updated their website accordingly. This ensured people searching for hotels would be redirected to their website.
Social Media Marketing Strategy of OYO
OYO uses Facebook to share location-based posts, promotional posts, and posts related to the detailed progress of the organization. These posts helped people to browse destinations to travel, and regular promotional posts provided customers with offers and discounts, encouraging them to book OYO.
OYO reposts pictures taken by travelers and users of OYO on their Instagram handle. Along with this strategy they implemented Facebook marketing strategies to Instagram. This strategy leads to an engagement rate and encourages people to tag OYO in their posts.
OYO Meme Marketing Strategy
OYO often works with influencers who create content around travel. This is either done via posts or re-posts. These posts are about the experience these influencers have during their vacations and not about their stay at OYO. The core idea of OYO’s influencer marketing is that you will need a place to stay whenever you go out for a vacation and here comes influencers’ experiences.
OYO tweets as well as retweets informative content such as award wins and events, news as well and companies’ CSR activities which adds credibility to the brand in a not-so-obvious manner.
OYO is a well-established online portal for hotel bookings in India that can grow tremendously with the right digital marketing practices and the use of resources. The OYO marketing strategies put up in this article are for a better understanding of the reader. And, also to help the reader shape their ideas into creative campaigns that could be utilized in their business.
FAQs
What are OYO Rooms?
OYO Rooms is India’s largest branded network of hotel chains offering standardized rooms to their customers at an affordable price.
How are OYO Rooms different from online travel agencies?
When you book OYO Rooms, you get a guaranteed OYO experience across all the hotels unlike an online travel agency or marketplace where end-user service is not standardized.
What is OYO marketing strategy?
OYO uses a mix of traditional and digital marketing. It started with billboards, TV ads, flyers, and local partnerships to build trust. Later, it focused on digital marketing, using social media, personalized ads, and influencer collaborations to reach a wider audience.
Does any payment need to be made at the time of booking?
Customers have the option to either make an advance payment or at the time of the hotel’s check out.
I am a hotel owner. How can I partner with OYO?
In order to partner with OYO Rooms, you have to visit partner.oyorooms.com and fill up a simple OYO rooms registration form by stating your name, mobile number city, and property type i.e. home, commercial, and hotel and click on Become an OYO to submit this form.
How much does OYO pay to the hotel owner?
OYO Rooms charges a commission of 22% from its hotel partners. However, this commission does vary according to the services provided by the brand.
The story of Gujarati motel owners in the United States is an inspiring example of hard work, smart business, and strong community support. It shows how they started small and grew into a big part of the hotel industry, making a huge impact on the American economy.
Asian American Hotel Owners Association (AAHOA), founded in 1989 represents over 36,000 hotels, employs more than 1.1 million people, and adds over 1.5% to the U.S. economy. Its members spend over $50 billion every year and own properties worth $1 trillion.
The surname Patel is synonymous with motels so much that there is a light-hearted joke prevalent in America that the Patels have their own “Patel Motel Cartel”. Now let’s delve into the origins of how it all began – the story of Gujarati motels in the United States.
Kanjibhai Desai: The King of the Motel Business
It all began in 1942 when a man named Kanjibhai Manchhu Desai left Gujarat in search of new opportunities.
He was joined by two Gujarati farmworkers, and they took over a 32-room hotel in Sacramento, California, after the property’s Japanese-American owner was forced to report to a World War II internment camp.
Soon Desai moved to the Hotel Goldfield in San Francisco, where he also enlisted the help of other immigrants from Gujarat. The Immigrant and Nationality Act of 1965 also acted as a catalyst for this process, as now more Gujaratis were allowed to pursue their dreams of settling in the United States.
Other Gujaratis also followed, not only from India but also from other parts of the world. Most of them moved in as refugees from Uganda when their dictator Idi Amin ordered to expel of around 55,000 Indians who were living there, and a majority of them were Gujaratis.
They soon found a new home in the various districts of America. Some Gujaratis also came from other parts of the world, like the United Kingdom, Pakistan, etc.
By the 1980s, the second-generation kids of these immigrants started expanding the frontiers of their parent’s businesses. For example, they acquired furthermore motels to build their chain of motels across various states.
They made further renovations and this led to even more revenue. By 2007, they owned around 21000 of the 52000, a staggering 42% of the US hospitality market.
Desai’s contributions to the motel industry and the Indian American community have been widely recognized. In 2003, he was inducted into the American Hotel & Lodging Association’s Hall of Fame, and in 2006, he was posthumously awarded the Ellis Island Medal of Honor for his contributions to the hospitality industry and the country as a whole.
Gujarati-Owned Hotels in the USA
Gujaratis are a prominent ethnic group in the Indian-American community and have a strong presence in the motel industry. The Gujarati-American Hotel and Motel Association (GAHMA) represents a significant number of Gujarati hotels and motels in the United States.
Key Factors Behind the Rise of Gujaratis in the Motel Business in the United States
Strong Community and Family to Rely On
The Gujarati Patel community shares a strong bond, be it with their friends, family members, or anyone within their community. This can be symbolized when Kanjibhai Desai encouraged his community to enter the hospitality business with the quotation: “If you are a Patel, lease a hotel.”
It is widely reported that they trusted a fellow community member so much that they would give them when needed a “handshake loan”. These types of loans do not involve any sort of collateral, no strict payment schedule in the form of installments, or anything they can pay whenever they want.
They also took the help of their partner and children, to help them run the daily operations, and if these were not enough, they also called their distant relatives from India to aid them for free. This was different, unlike say other American owners who had to pay out a significant portion of their revenue in the form of wages to employees. Thus, the Gujarati motel owners made the motel their own home.
This statement by Gary Patel, a small motel owner in Michigan, explains the gist of the whole paragraph,
“About 40 percent of the Patels know each other, through friends or family, so when you buy your first property, there is someone to help you with the down payment, someone to be a partner.”
Strong Work Ethic
Gujarati motel owners strongly believe in “Athithi Devo Bhava” as in Guest is God. So, these Gujarati motel owners would work hard to ensure their customers faced no issues during their stay and if they somehow had, it, such as say the pipes being clogged, or say any other basic issue, they would rather learn how to fix that issue on their own, instead of hiring a third-party vendor to cut costs.
They were ready to do the dirty, unglamorous work to attain their goals as they saw the long-term benefits.
Strong Business Acumen
Gujaratis have a strong business acumen that is they always look for better opportunities and capitalize on the right moment.
This can be explained by this statement of Vinay Patel, a second-generation immigrant who currently owns a full-service Holiday Inn in Sterling, Washington where he said that his parents built one hotel and sold it, then built another and sold it, and they repeated this chain of buying motels at a low cost and selling them at a high cost.
The Challenges Gujaratis and Patel Owners Had To Face
One of the biggest obstacles they had to face was racism and xenophobia. They were not accepted in their society and had to face taunts about how they were of an “inferior race” and so on.
White motel owners, especially in the rural parts of America, had to put up signs with “American Owner” and so on. But they managed to overcome all of these through their hard work and determination.
Running motels has become more expensive due to higher costs for maintenance, utilities, and staff. Patel hotel owners face labor shortages, making it hard to find and keep skilled workers. This has increased staff duties and pushed owners to find new ways to hire and manage workers.
Patel hotel owners must manage their online presence through travel websites and reviews. They need to keep good ratings, check reviews, and update their profiles, which takes time but is important.
They made a lot of efforts to get along with the local community, they contributed a lot of their profits to the educational institutions, hospitals, etc, which won them a lot of faith. Now the second-generation and beyond immigrants are integrated with their society as a whole.
The Patel Hotel Owners: Who Owns the Most Hotels in the USA?
The Patels first entered the hotel industry in the 1940s and 1950s, with many family members immigrating to the United States to pursue business opportunities. Over time, they developed a reputation for providing affordable and comfortable accommodations to travelers, particularly those on a budget.
The Patels are not a single entity, but rather a large extended family with many branches and business operations. However, they have a number of traits and strategies in common that have contributed to their success in the hotel industry.
For example, they often purchase and operate lower-cost hotel brands, such as Motel 6 and Super 8, and tend to focus on owning and operating multiple properties near one another.
Overall, the Patel family’s success in the hotel industry has made them an important part of the business landscape in the United States, particularly in the budget hotel segment. Let’s explore the incredible journey of Chan Patel and his inspiring success story.
The story of Chandrakant(Chan) Patel is a good case study that enunciates all the major reasons why Gujarati motel owners have succeeded. He came to the United States in the 1960s for his higher studies and soon got a job as an executive at the now-defunct domestic airline Braniff International. He also married and had four children and life was going smooth.
In 1976, he bought Alamo Plaza Hotel Courts Dallas, in addition to his job as an executive. He was the first Indian hotel owner in Dallas. During the lunch break of his job, he would man the front desk during that time and give a helping hand to his wife to do laundry for the customers and other odd jobs.
Chandrakant (Chan) Patel – First Indian Hotel Owner in Dallas
Soon he found it tough to maintain both tasks, and while he had to sacrifice his personal life, he also realized the benefits he was having. He saved a lot of money in terms of rent, utilities, and phone bills because he was staying on his property.
He never felt bad doing small jobs because of the various gains he made financially. He wanted to focus on getting more revenue, so he took the bold risk of quitting his stable job as an airline executive.
Soon, his income doubled from the 35,000 dollars he was earning from the airline job and the motel business in USA grew exponentially like he had 13 motels under him by 1987 from the one he had eleven years ago.
After that, he passed this business to his sons and began a new venture of starting a bank, which he did by the name of State Bank of Texas, which was to help immigrants get affordable loans for their new businesses. This bank also became a successful venture and by 2018, it was seen as one of the top 100 community banks with assets less than 3 billion dollars in America.
Chandrakant Patel is thus a success story who personifies all the reasons for how Gujaratis have succeeded.
In Popular Culture
They have been depicted in various forms of media. The 1991 Denzel Washington-starrer “Mississippi Masala” is about how a Gujarati couple and their daughter had to leave Uganda and how they assimilate with African-American culture when they decide to settle in Greenwood, Mississippi as refugees.
Life Behind The Lobby Book
Noted author Pawan Dhingra has also published a book titled: “Life Behind the Lobby: Indian American Motel Owners and the American Dream” in which he focuses on all these details about the Patel Motel Cartel in detail.
Surat to San Francisco
Indian American author Mahendra K. Doshi highlighted the important role of Patels in the U.S. hotel and motel industry, tracing their roots to Gujarat. His book “Surat to San Francisco” explored their inspiring journey, documenting how this community rose to shape the American hospitality sector.
Patel Motel Owners: Future
Future Outlook for Patel Motel Owners:
Sustainability Efforts: Patel owned hotels are expected to adopt eco-friendly practices as environmental concerns grow. This may include improving energy efficiency, reducing waste, and saving water to meet new standards.
Global Growth and Partnerships: Some Patel hotel owners may expand their businesses beyond the U.S. into new markets and tourist spots. They may also partner with local businesses and attractions to offer unique packages, making their hotels more appealing to travelers.
Better Loyalty Programs and Services: To meet trends like remote work and digital nomads, Patel Motels may offer long-stay packages and work-from-hotel services. They will also improve loyalty programs with rewards to keep customers coming back.
Conclusion
In conclusion, the motel business in USA is a dynamic and rapidly growing industry, and the Gujarati community has made a significant impact with their entrepreneurial spirit. The Patel Hotel Owners are a prime example of this success, with an impressive portfolio of hotels that have made their mark on the industry.
Despite challenges, their continued growth and exploration of new business opportunities serve as a motivation to others in the industry. The Patel family’s success is a testament to the power of hard work, dedication, and a willingness to adapt and innovate in an ever-changing business landscape.
FAQs
How many US hotels are owned by Indians?
One out of two US motels or hotel businesses is owned by Indian Americans.
Who owns most hotels in USA?
Wyndham Hotel Group owns the most hotels in the USA, the company has over 9000 hotels in over 95 countries, with roughly 893,000 rooms.
How many hotels are owned by Patels in USA?
Asian American Hotel Owners Association (AAHOA), founded in 1989 represents over 36,000 hotels, employs more than 1.1 million people, and adds over 1.5% to the U.S. economy. Its members spend over $50 billion every year and own properties worth $1 trillion.
Which is the first Indian owned hotel in USA?
Kanjibhai Manchhu Desai is believed to be the first Indian to own a motel in the U.S. He bought the Goldfield Hotel in San Francisco in 1937.
Back in 2013, a college dropout spotted the untouched opportunity in organizing India’s budget hotels while travelling through the country. His startup has reached up to 3.5x growth in revenue when it was valued at 10 Billion dollars in October 2019.
It’s easy to guess that OYO Rooms, a thriving venture by a young entrepreneur Ritesh Agarwal, is being spoken about.
The funding marks OYO’s presence as India’s most successful unicorn. OYO has successfully raised a whopping $4.1B, as of August 20, 2021. The company has marked its footprints beyond India—in China, Malaysia, Nepal, and the UK. Here’s an insight into Oyo Rooms subsidiaries, growth and the challenges faced by Oyo.
In 2012, Ritesh Agarwal launched Oravel Stays to enable the listing and booking of budget accommodations. After months of research and experiencing various bed and breakfast homes, guest houses, and small hotels across India, he pivoted Oravel to OYO in May 2013.
OYO partners with hotels to offer world-class guest experiences across cities. Shortly after launching Oravel Stays, Ritesh Agarwal received a grant worth $100,000 as part of the Thiel Fellowship from Peter Thiel, which greatly contributed to shaping his startup.
OYO Rooms currently houses 17,000 employees globally, of which approximately 8000 are in India and South Asia. OYO Hotels & Homes is now recognized as a full-fledged hotel chain that leases and franchises assets.
Over a span of six years, the startup expanded globally with thousands of hotels, vacation homes, and millions of rooms in hundreds of cities in India, Malaysia, UAE, Nepal, Brazil, Mexico, UK, Philippines, Japan, Saudi Arabia, Sri Lanka, Indonesia, Vietnam, the United States and more. It is even valued higher than the renowned Taj group of hotels and Oberoi hotel chain.
As per the DRHP filed by the company recently, the total income of OYO, which stood at Rs 13,413.26 crore in the previous FY20 fell by nearly 70% in FY21, standing currently at Rs 4,157.38 crore. All of these can be pointed out as the adverse effects of the pandemic, which restricted the Indians largely to their homes. However, it is important here to note that the company saw a massive 70% contraction in losses though.
The losses of Oyo became as less as Rs 3,943.8 crore in FY21 when compared to the loss of Rs 13,122.77 crore in FY20. This is due to the reason of the huge fall in the expenses of the company, which was recorded at Rs 22,800.12 crore in FY20 and came down to Rs 6,936.07 crore. The company’s expenses on employee benefits also drastically declined by 63% to Rs 1,742.12 crore in FY21, from Rs 4,765.28 crore in FY20 because of numerous layoffs.
The business that undoubtedly bore a considerable amount of the brunt of the pandemic is looking to rise again after the lockdown relaxation this year 2021. Oyo took its first step towards growth by raising funding from the American software giant, Microsoft, as part of strategic investment.
Along with Microsoft, Oyo has a set of other strategic investors, which includes Chinese ride aggregators Didi Chuxing; South-East Asian ride-hailing giant, Grab and Airbnb, American online marketplace for lodging, tourism, and homestays.
The total valuation of OYO is $9.6 Bn, as of August 20, 2021, after the company raised $5 Mn from Microsoft.
Oyo Rooms Subsidiaries
Oyo Rooms have acquired 8 companies to date. Denmark-based data science firm, Danamica was the last company that was acquired by OYO on September 2, 2019, at $10M, after which Oyo acquired Direct Booker on May 9, 2022. The Croatia-based hospitality service provider has more than 3200 homes with it and has serviced 2 mn+ customers so far. The acquisition of the Nikola Grubelic and Nino Dubretic-founded company is expected to strengthen Oyo’s presence in Europe, especially in Croatia.
Oyo has raised a funding of $3.1B in total, as of January 13, 2022. The company raised $29.72Mn in funding on January 13, 2022. Oyo previously raised an undisclosed debt financing round on December 16, 2021. The Ritesh Agarwal-led company raised its Series F round worth $5Mn on 20th August 2021, which was led by Microsoft. The company has seen 22 funding rounds to date.
Softbank Group, Lightspeed Venture partners, Airbnb, Sequoia India, Microsoft, Chinese Didi Chuxing, Garb, and more make up the lead investors’ panel for OYO.
Date
Stage
Amount
Lead Investors
January 13, 2022
Secondary Market
$29.72M
Qatar Insurance Company
August 20, 2021
Corporate Round
$5M
Microsoft
July 29, 2021
Corporate Round
–
Microsoft
July 16, 2021
Debt Financing
$660M
–
March 11, 2021
Debt Financing
$200M
Softbank Vision Fund
Jan 6, 2021
Series F
$7M
Hindustan Media Venture
Dec 10, 2019
Series F
$1.5B
Ritesh Agarwal, Softbank
Nov 30, 2019
Debt Financing
$6.73M
MyPreferred Transformation
April 1, 2019
Series E
$75M
Airbnb
Feb 14, 2019
Series E
$100M
Didi
Dec 7, 2018
Series E
$100M
Grab
Sep 25, 2018
Series E
$1B
Softbank Vision Fund
Oyo is currently eyeing an IPO soon for which the company is likely to file its Draft Red Herring Prospectus (DRHP) within the next 10 days, according to the reports dated September 23, 2021. The company is looking forward to raising around $1 Bn through its IPO round, which will consist of an offer for selling shares from the existing shareholders along with some fresh issues of shares.
Oyo has shortlisted 3 investment banks – JP Morgan, Kotak Mahindra Capital, and Citi eyeing its IPO that is to be worth over $1 billion, as per the last reports on August 9, 2021. The hotel and hospitality industry was among the most affected industries due to the strike of the Covid19 pandemic.
Now that the world is unwinding, this industry has the potential of witnessing a record recovery. This is also the reason why the software giant, Microsoft is planning to invest in this sector, and Oyo will not lose out on this opportunity of receiving the much-needed funds from Microsoft, which is why it is gearing up towards an IPO.
Furthermore, OYO has allegedly decided to proceed with a domestic IPO, however, they would also keep other options open.
Oyo has filed its Draft Red Herring Prospectus (DRHP) along with the details of its upcoming IPO round on October 1, 2021. The hospitality giant is looking to raise around Rs 8430 crores, which will be consisting of an offer for sale (OFS) of Rs 1,430 crores and a fresh issue worth 7,000 crores. SoftBank Vision Fund will offload shares worth Rs 1,328.5 crores and shall be standing as the biggest beneficiary of the OFS whereas, Global Ivy Ventures and China Lodging Holdings will be selling Rs 23.13 crores and Rs 51.62 crores worth of stakes respectively.
Oyo might raise close to Rs 1,400 crores with the help of a private placement in a pre-IPO round before the listing. This might reduce the size of its IPO to Rs 7,030 crores.
The upcoming IPO of OYO is on the back foot. This is because the Federation of Hotel & Restaurant Associations of India (FHRAI) the regulatory body of the hotels, has written to SEBI, charging the company over alleged fraudulent and unfair business practices, as reported on October 26, 2021.
Oyo was earlier charged by FHRAI for the ‘anti-competitive’ measures that the company has embraced, with the Competition Commission of India (CCI). Furthermore, FHRAI also noted that an investigation by the anti-trust body is still pending and in its advanced stages. Besides, the company has also significantly failed to disclose the information.
According to the hotel’s regulatory body, Oravel did not make a fair disclosure on the nature and consequence of the CCI-directed investigation and in turn, “has tried to confound investors by conflating irrelevant issues relating to the interim reliefs sought by RubTub Solutions Private Limited (Treebo) and Casa2Stays Private Limited (FabHotels)”
All these are reasons enough that the IPO of Ritesh Agarwal-led Oravel Stays will more likely be rejected because no past incidents where a company was under the CCI probe have been allowed to go ahead with the IPO.
Despite the shiny, successful exterior, OYO’s reputation has been dubious soon after its founding. OYO’s work culture raises questions about the proficiency of its business, according to financial filings, court documents and interviews with 20 current and former employees along with the others familiar with the startup’s operations.
Unethical growth strategies
OYO offers rooms from unavailable hotels, those that have halted its service, according to the company’s chief executive and nine of the current and former employees. This boosts the number of rooms listed on OYO’s site.
Thousands of rooms are from unlicensed hotels and guesthouses, its executives have acknowledged.
To save the trouble from the authorities over the illegal rooms, OYO sometimes provides free stays to the police and other officials, according to nine of the current and former employees and internal WhatsApp messages, as viewed by The New York Times.”
Having a huge base of unmarried couples, a scheme involved workers at properties run directly by OYO conspiring to keep the guests checked in after they left. The workers then cleaned and resold the rooms for cash to other guests and nabbed the money, says an ex-worker.
Complaint of unpaid dues
OYO charges extra on hotels while refusing to pay the amounts to the hotels, which they claimed they were owed, according to the interviews with several hotel owners and employees, legal complaints, and emails viewed by The New York Times. Some hotel operators have filed criminal complaints against OYO, which said it retained payments. Aditya Ghosh, OYO’s head of India operations, dismissed the argument as “noise,” he said, “the disagreement is about the penalties we charge on customer service failure”.
Protests by hotel owners
Independent protests by small-scale hotel owners are surfacing up in mid-tier towns like Pune, Kota, Manali, Ahmedabad and Jaipur as well as Delhi and Bengaluru. They claim that OYO has been eluding them of their promised returns and minimum guarantees by imposing a ream of charges, often without informing them. Many of these charges are not specified in the contract between the owner and OYO.
The protestors state that OYO’s accounting and auditing process, and the penalties associated with petty faults and errors, are so heavy that they sometimes find themselves owing money to OYO at the end of the month.
Covid-19 Impact
Almost every business suffered a lot due to Covid-19, OYO was not any different. The hospitality business suffered a lot, and the occupancy rates of the hotels slow down due to all the lockdown curbs imposed by the Government. Even after the lockdown was over, people were being cautious and were avoiding travelling, so naturally, the occupancy rates were not increasing.All the restrictions created a negative impact on the revenues of the business
Despite the hurdles, OYO has broadened its horizons beyond the bounds of India as well as just hotels. “Anyone who’s tried to innovate and attempted creating large organizations has faced bad press; Mark Zuckerberg, Steve Jobs, Elon Musk, Bill Gates—so I think he’s in the regal company,” said Ankur Nigam, a partner at KPMG. “I don’t think it’s fair to judge whether he’s a good leader. What’s visible is that he’s managed to build a $5 billion company and nothing succeeds like success”.
Oyo happened to be one of India’s most gifted startups. It witnessed its valuation jump to $10 billion in 2019. Additionally, Ritesh Agarwal also had in his hand 30% of the profits. However, belonging to the hotel and hospitality industry, Oyo also happened to bear the brunt of the coronavirus pandemic. This is the sole reason why it saw a drop in its valuation in 2020.
The unicorn startup was valued at $8B by the Hurun Global Unicorn Report 2020. After the last funding round led by the software giant, Microsoft, Oyo’s valuation jumped $9.6 Bn, as reported on August 20, 2021. Oyo has bigger plans upcoming that the company feels too early to disclose.
It’s one thing to think of business tactics, and another to be morally wrong. OYO should realize the fact that integrity is what makes the pillars strong in the long run. If it loses its ethics in the first few successful years, it’s impossible that the company would ever be remembered for any good.
Diversification of its humble beginnings as a budget hotel chain, Oravel Stays—the entity that owns and operates the OYO brand clearly aims for the sky and has accomplished triumph in the last five years to mark its eminence.
FAQs
What is the problem with Oyo?
Oyo rooms is facing challenges like protests from hotel owners, Complaints of unpaid dues and unethical growth strategies.
Is Oyo losing money?
Although Oyo has managed to narrow its losses from ₹12,799 crores in 2020 to ₹3,929 crores in 2021. The revenue of the company has plunged rapidly during the Covid-19 pandemic.
Who are Oyo’s competitors?
OYO Rooms’s top competitors are MakeMyTrip, ClearTrip, Yatra, Treebo and Fabhotels.
A traveller, a tourist and a first-time backpacker. These three have something in common despite their differences in experience. They all want a peaceful night to stay after having a long walk to someone’s dream place or to a normal visit or a trip. The business of giving people home or a place to stay dates back to AD 707.
The hospitality business is one of the indestructible industries wherein famous chains have generations of families leading, in particular, the empire built by people through hospitality. Hotels are the face of this industry. There are buildings that provide people with a place to stay with the utmost comfort. They make people feel cosy in corners not owned by them, yet have rights over them.
Thehotel industry was once owned by the owners with no regulatory bodies on the top of their heads. They had their own business model. But the new generation turned the system into a marketplace that involved filters of the various layers. The whole system was immediately converted into a well-oiled machine. A new system that sided with the huge Indian population.
This huge system turnover was brought by a 22-year-old Indian Boy named Ritesh Agarwal.
The Tourism and Hotel Industry in India is one of the main drivers of growth among the services sector of the country. The tourism industry in India has significant potential as it has rich & diverse culture, historical heritage, a vast range of ecology, and flora and fauna. Indian is known for its geographical diversity, attractive beaches throughout the coastline, 27 world heritage sites, 10 biogeographic zones, 80 national parks and more than 441 sanctuaries.
According to reports, over 39 million jobs were created in the tourism sector which equates to over 8% of the total employment in India. By 2029, the country’s tourism sector is expected to grow 6.7% to reach $488 billion, which will account for 9.2% of the country total economy. The industry has slowed down due to the Covid-19 pandemic in 2020 and 2021, as the country had many lockdowns and restrictions on travel.
As per the Federation of Hotel & Restaurant Association of India (FHRAI), the Indian hotel industry had a loss of approximately $17.82 billion in revenue due to the ongoing pandemic. Despite taking a hit, the industry is looking to come back up with the help of schemes and opportunities provided by the government. The Indian Government is providing free loans to the MSMEs to help them deal with the crisis and revive the tourism sector.
It is also planning to tap into a staycation, which is an emerging trend where people stay at luxurious hotels to revive themselves of stress in a peaceful getaway. With many upcoming developments, the international tourist arrivals are expected to reach 30.5 billion and generate revenue of over $59 billion by 2028. OYO and Airbnb have in many ways helped the industry grow especially in 2020 and 2021, as domestic tourists are expected to drive the growth post-pandemic.
OYO Vs Airbnb – Experience in Industry
Ritesh Agarwal, Founder & CEO of OYO Rooms
When it comes to trust, experienced companies are trusted more.
Ritesh Agarwal, the founder of OYO, formed the most famous chain of leased and franchised hotel chains. We Indians often refer to it as a place to look for the best deals for hotels, The Oyo Rooms. Oyo Rooms started 7 years ago with a bunch of hotels. The company has now expanded globally with thousands of hotels and vacation homes. Oyo Rooms was started in the year 2013.
Ritesh is the second youngest self-made billionaire in the world.
Airbnb’s Founders
Airbnb was conceived years ago by two roommates who rented out an air mattress in their living room. This turned their whole apartment into a bed and breakfast. This was done to sustain the high-priced living in San Francisco. This gave the company its name Airbedandbreakfast. Airbnb was started in 2008.
So the winner here is, Airbnb, which has a lot of experience.
Both the companies share a common goal, i.e. to provide accommodations, a safe place and comfortable corners to people. Yet both the companies have a very different working business model.
Oyo is often believed to be India’s answer to Airbnb. This article will take you through the different business models and things that are uncommon between the two companies.
OYO Vs Airbnb – Front-end
OYO Rooms
OYO, as people know, is a website where one can go through various filters and find a hotel. But this is the front-end of how the Oyo company is. Oyo is a marketplace for only hotels.
Airbnb
However, Airbnb is a marketplace that helps a traveller find an abode of his type. It can be for lodging, primarily homestays and homestays. It also lets the provider of the property fix a price. This helps both sides as well as Airbnb. The company has recently started offering experiences too.
This shows a more varied and real-world applied concept. So, Airbnb has a better front-end.
OYO Vs Airbnb – Places to Stay
OYO Online Booking
Oyo used to get hotels and book a majority of the rooms for a definite time. It then standardizes the room according to the Oyo standards. Later, list the hotels on its website with huge and heavy discounts. The whole business model used to work by acquiring clusters of hotels for a definite time. Standardizing them and making them proper before listing.
Airbnb Online Booking
Airbnb is based on the sharing economy. It makes owners share the property or rooms they own with travellers who in turn share money with the owners. It is believed to be the most successful business that works on sharing economy. A two-faced system that works for the public.
OYO Vs Airbnb – Stay Duration
Oyo works on hotel stays, so an individual can stay there for a good amount of time. Oyo rooms have no particular rule about leaving a room after a set date. The whole system is similar to how one can stay in a hotel. But in Airbnb, there is a 90-day rule. This rule was introduced in 2017. This rule is only for areas in London. The listings in that area cannot be occupied for more than 90 days.
This makes Airbnb not suitable for very long.
Oyo had 5,855 hotels in its network in the year 2016 with an inventory of over 68 thousand rooms. If compared to today it has a portfolio of more than 35 thousand hotels and 125 thousand vacation homes. It has over 1.2 million rooms across 80 countries and 800 cities.
But, the founder and CEO of Oyo – Ritesh Agarwal made an announcement in the year 2017 that the company had evolved its Oyo business model to 100% franchise, managing, or operating. He also mentioned that his company would no longer go for hotel aggregation and will shift towards becoming a proper full-scale hospitality company. The CEO stated that this change in business model will reduce operational costs. Hence, improve service.
Oyo changed its business model to the Franchise model in the year 2017. The company earlier used to take up some rooms on lease and would sell them to customers. This model involves partnering with many hotels and asking them to operate as a franchise. Then selling their rooms to all the customers at competitive prices.
Airbnb, known for not owning any of the properties. Yet known for having a business that does work on providing shelter. All the company does is providing a platform. A platform on which all the people can rent out properties they own or spare rooms to guests. The property prices are set by the owner themselves. But the company intervenes when it comes to the collection of money.
The Business model of Airbnb is a multi-sided marketplace that connects all the travellers with the host and experience providers. The company makes money from the fees that come from bookings from stays and experiences. Airbnb’s model is exponential when it comes to growth.
Airbnb has a better business model in terms of customer comfort and reach.
Airbnb’s business model is quite simple yet very innovative which often dubs it as the world’s fastest-growing travel site.
Oyo charges around 22% of commissions. This has to be paid every month by the hotels’ owners. However, commissions may vary as per the services and features offered. Oyo also charges a commission out of the room reservation fee according to their services chosen.
Airbnb makes all the money through commissions. It charges a 3% commission on every booking from hosts and between 6 – 12% from guests. Unlike Oyo, Airbnb takes reviews and feedback from both ends. Be it the host or the guest, this makes it a proper marketplace.
Airbnb seems to have an upper hand at everything, making it a proper place to visit before actually vising one.
OYO Vs Airbnb – Customer Relationship Management (CRM)
Customer Relationship Management (CRM) is a tool that lets a company store customer and prospect contact information. It also helps the company identify sales opportunities, record service issues, and manage marketing campaigns. Depending on what type of CRM a company has, they can get basic information about their prospective customer and interact with them. CRM helps the company in better analyzing and understanding their customers, which will help them offer better and more efficient customer service. Airbnb and OYO have very different CRM strategies.
CRM of OYO
The CRM that OYO uses is Blueshifts Programmatic CRM, which has helped the company to become a leader in 1:1 customer engagement across all marketing channels. With Blueshift’s precise recommendations and targeted triggers, OYO has been able to achieve 5X higher bookings from email and mobile channels. The company also has a mobile-first approach which has helped it to expand in over 500 cities across ten countries.
CRM of Airbnb
The CRM that Airbnb uses is Twilio, which helps connect with hosts. How it works is, when a traveller makes a reservation through Airbnb, the host has 32 hours to respond to a booking request and this is possible because of its CRM. There is systematic mobile communication between hosts and travellers using a text message. The host can also decide whether they want to accept or deny the customer. The company also uses Hootsuite social media management, which helps them monitor their follower’s growth and social CRM. The system also helps the company to find certain keywords that can eventually be used in campaigns.
OYO Vs Airbnb – Marketing Strategy
OYO – Marketing Strategy
Oyo is known to use the 360-degree marketing method as it implies having a presence on all forms of digital and traditional media. They also have their unique room strategy which helps in attracting more customers with lower room prices in comparison to the base price of the hotel. Besides that OYO has made many successful multimedia marketing campaigns such as #AurKyaChahiye. It also shares location-based posts, promotional posts, which helps people to browse destinations to travel, check for new offers & discounts and encourage them to book OYO.
Airbnb – Marketing Strategy
Airbnb on the other hand uses the marketing approach to building and maintaining a strong community among its users. It also mainly targets long term loyalty from both the guests and hosts. The main marketing strategy of the company is to take your business in front of your potential guest and turn them into bookers. The customers who previously enjoyed their stay with Airbnb places are sent an email encouraging them to list their own property. Airbnb India aims to make its guests feel welcome, its app did the same, as it has a unified interface on Android and iOS platforms.
OYO Vs Airbnb – Social Media
OYO on Social Media
Over the years the company has leveraged the power of social media as it has been able to retain its ranking and stay ahead of OYO competitors in the market. OYO currently has over 169k followers on Instagram and 65.4k followers on Twitter, with actor Sonu Sood as its current brand ambassador. On all the social media platforms, the company promotes itself as being a brand that offers two types of services which are promoting tourist spaces and a safe space to spend time with your loved ones in your own city. OYO also uploads many ad campaigns like ‘Fir Badhega India’ and ‘Sanitised Stays’ that helps in engaging with their customers especially during the COVID-19 pandemic.
Airbnb on Social Media
Airbnb has a different approach to social media marketing as it heavily relies on awareness generating strategy. The company also uses travel influencers to further promote the platform as it does its social media relies on user-generated content (UGC). So far the company has over 4.9 million followers on Instagram and 733k followers on Twitter. It also has over 6.3 million photos using #airbnb on Instagram which shows us how widespread the company is. Airbnb also heavily invests in video marketing as a part of telling its brand story, it currently has more than 500 videos generating over 100 million views on YouTube.
Conclusion
In a nutshell, Airbnb and Oyo share the same kind of services, i.e. hospitality service. Moreover, Airbnb is a website for people to list, find and rent lodging whereas Oyo is a chain of budget and premium rooms partnering with different hotels. Oyo is all about providing a customer experience within a stipulated budget range while Airbnb doesn’t control the customer experience as such.
FAQs
What is the difference between Airbnb and Oyo?
OYO has more hotel rooms whereas Airbnb has more residential plots. In Airbnb, the apartment may have been misinterpreted, not so in the case of OYO as an audit is done every week.
Are OYO Rooms similar to Airbnb?
OYO’s business model is kind of similar to that of Airbnb, i.e. they are an online aggregator of budget hotels. Bookings for these rooms would be made via the website and the mobile app of OYO Rooms. However, the main focus is always is the quality of service provided.
How to give your property to OYO Rooms?
For OYO Rooms registration, you can write an email to partner@oyorooms.com or give a call to this number +91 70530 70530.
Is OYO successful?
OYO Rooms has been one of the most successful startups in India being the country’s largest budget hotel chain. It focuses on standardizing the hotels in the non-branded hospitality sector.
Is Airbnb better than Oyo?
OYO is better in terms of privacy and security. OYO assures quality service while Airbnb doesn’t guarantee anything from their end.
What makes a startup idea remarkable is its potential to solve a problem and make people’s lives easier. The issue does not have to go unaddressed; the question is how effectively it can be addressed. Many company models are based on this notion. With that in mind, allow me to share Trivago’s amazing startup story and its business model with you.
Trivago is a multinational technology company based in Germany that specializes in internet-based hotel, lodging, and metasearch services and products. It was Germany’s first hotel search engine, and it is now one of the country’s fastest-growing businesses, with profits doubling since 2008.
Expedia Inc. holds a majority of the equity in the firm. A hotel search company with the main objective of changing the way people search for and compare hotels online. It also offers hotel advertisers to promote their brand on the Trivago website providing them access to a broader target audience who visits its website.
How was Trivago started?
Earlier, booking a hotel used to be complicated. There used to be frauds and people were not able to get better deals. Looking at this problem gave rise to new startups such as Expedia, Orbitz, etc. that allowed customers to compare prices and get the best deals.
People liked this idea and these startups quickly gained traction. Rolf Schrömgens, Peter Vinnemeier, and Stephan Stubner saw this as an opportunity and they came up with this new hotel aggregation site which they named Trivago.
It was founded in 2005 in Dusseldorf, Germany where its headquarters are. It was first established in a garage. It was like a bootstrapped company with very little external capital and on going away with little steps and small steps forward. They grew very slowly in the beginning but eventually gained momentum.
Trivago has evolved from a €1.4 million seed investment to become one of Europe’s most renowned unicorns. Today, they have 3 million hotels and alternative accommodations, search through more than 250 booking sites, active in more than 190 countries on 54 platforms, 33 languages, and more than 100 filters that you can apply to your search.
Founders & core team
Founders:
Rolf Schrömgens
Stephan Stubner
Peter Vinnemeier
Malte Siewert
Trivago’s core team:
Axel Hefer – Chief Executive Officer (CEO)
Anja Honnefelder – Chief People Officer (CPO)
Matthias Tillmann – Chief Financial Officer (CFO)
James Carter – Chief Product and Technology Officer (CTPO)
Trivago has 2 types of customers. The first type includes partners like hotels, online travel agencies, and media who promote their products on the Trivago website. The second type is guests like travelers who compare offerings and pricing before making a purchase decision to book their desired hotel.
Key partners:
Hotels, online travel agents, and guests are among Trivago most important partners, but so are media and advertising firms, payment processors, and investors and stakeholders.
Key activities:
Based on key resources, Trivago acts as a platform for hotel brands to display their offerings and customers can find what they want. It manages guest and hotel networks, develops its products, and conducts sales and marketing.
The Company promotes transparency by allowing users to contribute to the content on its website. They can add content to hotel and cabin brand portrayals, complete missing brand profiles, and change profiles for quality assurance.
Personalization:
The platform encourages personalization by allowing firms to customize their profiles in a variety of ways.
Convenience:
Users can search for a variety of alternatives and narrow down results using hundreds of filters available on the platform.
Brand/positioning:
Because of its success, the site has developed a strong brand. It receives 120 unique visitors every month, indicating that it has a large user base. Trivago is one of Germany’s best and fastest-growing startups, with its advantages multiplying since 2008.
Customer relationship:
Trivago is an entirely automated platform, thus users have very little or no engagement with the team. The site’s FAQs answer the majority of questions, and email support is available for personal assistance.
Key resources:
Trivago most valuable assets are its website and application through which customers can search for hotels. Its highly trained workers are another crucial resource for maintaining and updating the website. In addition, being a startup, it is reliant on investor funding, which raised $53.8 million in December 2010.
Cost structure:
Technology setup and running costs, personnel pay, sales, and marketing divisions all contribute to the overall cost structure.
How does Trivago earns Revenue?
We know Trivago doesn’t offer tangible products or has no tie-ups with other hotels. So you might be wondering how it makes money. Here’s how.
Listings:
Trivago charges commissions to online travel agencies for promoting their services and hotel rooms on the Trivago website.
Services:
Trivago earns revenue by managing the listings i.e. the presence and visibility of hotel brands on their platform. For this, they have a feature known as Hotel Manager PRO wherein hotel brands need to pay the subscription fees.
Cost Per Click:
Trivago links itself to other websites like Oyo and Make my trip. When people visit the Trivago website and want to book their desired hotel, they get redirected to the hotel’s website.
Trivago is promoting the hotel’s products and services and driving a sale for them. They are referring it to customers and in turn charge commission for doing the same. This is known as affiliate marketing or Cost Per Click (CPC) wherein they get paid whenever customers click on a link of that hotel’s website and their entire revenue model is based on this.
A customer is referred to the website of the advertiser when the user clicks on the deals present in the search results. Trivago charges money for every referral. This model is known as the Cost-Per-Click (CPC) model.
What makes Trivago unique?
Compared to other hotel search engines, Trivago’ USP is its product focus: hotel search. It doesn’t offer other features like car rentals or booking flights just the hotel price comparison making it less confusing for customers. It benefits Trivago as well such as:
They have no conflict of interest.
Can focus on developing their products.
Be committed to helping hoteliers compete and travelers locate their desired hotel.
Competitors of Trivago
The top three competitors of Trivago are:
Tripadvisor:
Trivago’s main competition is Tripadvisor. It is a publicly-traded firm based in Needham. The company was founded in Massachusetts in the year 2000 and works in the travel agency business. It employs 1745 people more than Trivago. Tripadvisor has revenue of $366.5 million dollars higher than Trivago. It has raised a total of $3712.8 million, which is higher than Trivago.
Booking.com:
Booking.com is another major competitor of Trivago. It was created in 1996 and has its headquarters in Amsterdam. It’s in the field of web-based software. It brings in $6798 million dollars more than Trivago. It employs 19,466 people more than Trivago.
The recovery process for the travel industry will be complicated but let’s see how Trivago faced these challenges and how it will reposition itself for the post-pandemic era.
In the fourth quarter of 2020, Trivago’s earnings and revenue plummeted. It lost €12.3 million in adjusted EBITDA, compared to a profit of $70 million in 2019.
Despite this considerable decline, Trivago saw this as an opportunity to innovate and bring back the old and think about the new customers as well. Instead of promoting the most popular destinations, they started promoting the hidden gems i.e. smaller cities that are not on the top of your list.
The destinations from where you start keeping it shorter or local trip. This is their new product launch i.e. new local trip offerings which are more inspirational compared to their core product which requires you to know where you want to go.
This recent diversification beyond traditional metasearch and new launches will help them target a broader audience and not just the ones looking for hotels at low prices. They are working on the second big release and will be coming up with new product launches.
Final Thoughts
Being one of the world’s most burgeoning hotel search engines, it has made it possible for us to find the best hotel at the best price. The company is focused on reorganizing and streamlining its business in light of the current volatile tourism industry. I must say, Trivago nailed the market demand and came up with a fantastic startup concept that was not just our desire but also the urgent need of the hour.
This was all about Trivago and its business model.
FAQ
Who is the founder of Trivago?
Rolf Schrömgens, Malte Siewert, Peter Vinnemeier, and Stephan Stubner are the founders of Trivago.
Is Trivago an Indian company?
No, Trivago is an German multinational company that specializes in internet-related services and products in the hotel, lodging and metasearch fields.
Who are the competitors of Trivago?
Trivago competitors include Booking.com, Tripadvisor, KAYAK and Expedia Group.
Do you enjoy traveling? Is your top priority safety and sanitation? You’ve found your ideal hotel, but is it out of your budget? In this scenario, you might consider staying in a Dharamshala, but their surroundings aren’t appealing. They do have a lot of rules so you may be wondering if it’s worth it to spend the money.
In light of this predicament, the concept of a “hostel for backpackers” was established. It’s similar to what we have currently in terms of hostels (assuming you are still in college and have come from outstation). There are shared rooms, a common dining room, and a variety of enjoyable activities and games with no or little constraints. In a nutshell, a youthful euphoria has persisted.
Solo travel and backpacking have become popular in this new era. We can now quickly learn about new places and obtain useful information by reading blogs or social media updates.
A startup called Zostel has a similar concept. It is the first hostel chain-based startup in India.
Zostel is like a hostel that provides a home environment with all of the necessary conveniences at an affordable price. Budget travelers, particularly those aged 18 to 40, can find safe, hygienic, and affordable lodging at Zostel.
They have air-conditioned dorms, both mixed and female-only, where rooms may be booked at a competitive price of 500 per night. It has an actual house with beds, a shared space with gaming, a spot for campfires, open mics, and other activities where they may socialize.
Every Zostel is unique since local aspects are taken into consideration when constructing the ideal city-centric Zostel. The founders have considered the importance of safety and comfort while attempting to maintain the vibe joyful and cool. Zostel seeks to deliver great enjoyment to travelers rather than just a place to sleep.
Zostel Hostels, Zostel Homes, Zostel Escape, Trusted by Zostel
Website
zostel.com
Zostel – Latest News
08 March 2021
Zostel, a hostel startup, alleges it has triumphed over OYO, however, the hospitality unicorn has denied such allegations, claiming that indeed Arbitration Tribunal has given Zostel no particular settlement in place of acquiring a stake in OYO.
3 October 2020
Zostel Hospitality Pvt. Ltd, which runs two franchises: Zo Rooms, an affordable hotel business, and Zostel, a travelers’ hostel network, has appealed to its clients to acquire INR 10 crore in fundraising at a pre-money worth of INR 75 crore. The startup has asked its clientele to become angel investors and contribute ranging from INR 5 lakh and INR 1 crore to the Zostel hostel brand.
10 August 2020
Zostel is investing heavily in local tourism, with plans to establish 500 more properties in the next two years. Zostel presently operates 60 hostels and guesthouses across the globe. The firm is soliciting funds from the market for Rs 10 crore.
Zostel – History
Whenever people from engineering and management backgrounds collaborate on any project, it leads to the greatest innovation of all time. Zostel, a hostel for backpackers was a huge success since most of us were waiting for this idea to be explored.
We’ve all seen the film “Queen” and agree that something similar should happen in our country. So, for you adventurous vacationers, Zostel provides the same thrilling experience.
On the occasion of Independence day 2013, Dharamveer Chauhan and his six buddies founded this exciting startup called “Zostel”. Their goal is to assist travelers to enjoy exploring Indian towns. It wasn’t just for backpackers, but also professionals and visitors. Seven pals came up with the idea of combining hostels and today’s Gen Z.
Zostel created homes with facilities and afterward equipped them to offer an atmosphere they have never been a part of with a limited budget of Rs 50 lakhs, participating in several B-school contests, and generating revenue through bootstrapping. Jodhpur developed the 1st Zostel, accompanied by Jaipur.
This company, which began with the hostel concept, is no longer limited to that notion but has evolved into a trailblazing travel solution company. It now operates in 37 cities across India and China, with over 200 hostels.
Zostel – Mission and Vision
The firm was established to encourage people to travel as a part of their lifestyle. They intend to contribute to the promotion of travel by building a reliable, enjoyable image and involving local people in the effort.
They strive for a basic, adaptable hotel and hostel brand with a great understanding of visitors, the latest trends, and the required confidence, that has garnered them an unconventional status in the travel sector.
With a simple approach, they hope to ensure that travelers simply pay for the features that they genuinely require and desire. They provide their clients with budget-friendly lodging in the heart of the city, with a strong emphasis on rates and comfort.
Zostel – Tagline and Logo
Zostel Logo
“Live it Now”, as the tagline suggests, Zostel is for intrepid adventurers. Throughout your stay, you will meet people who have had interesting and intriguing travel experiences.
During your trips, you seek peace. You get everything in one place, including well-furnished dorms, tasty foodstuffs, a private kitchen for cooking enthusiasts, game spaces, WIFI connectivity, and absolute coziness.
Zostel Hostel is the company’s main product. It may be found in most tourist destinations. Initially, the majority of Zostel’s properties were owned by the company. Then it devised a franchising strategy.
Zostel X
It is a service that allows you to stay in a private home. Instead of being in the heart of the city, they are found on the outskirts. It is mostly suitable for groups of visitors or families. It is a privately owned property that is rented out.
Zostel Escape
It was created to provide guests with authentic local services. Only locals provide the services, allowing travelers to go beyond the typical tourist attractions.
Zozo Bus: Zostel provides a Zozo bus service, which allows travelers to travel on a budget. It’s a 12- or 13-seater bus that brings you to pre-determined destinations.
OTA (Trusted by Zostel): As a brand, Zostel has consistently provided excellent service to its visitors, making it a reliable location to stay. Inquiries are coming in from places where Zostel does not have a hostel. In situations like these, Zostel has partnerships with local hostels, allowing it to provide OTA services.
Zo rooms: Zo Rooms is a Zostel subsidiary. Its like OYO, a hotel aggregator.
Zostel – Business Model
You may have heard about Zostel’s services, but its primary business model is franchise-based. Zostel came up with a unique project to assist and inspire imaginative minds who aspire to be entrepreneurs and escape from the chains of mundane existence.
Zostel will guide you in the process of opening your own Zostel at a place of your preference through this project. The choice of location and the ideal property to operate is based on your skills, belief, and viability. Zostel will help you with the setup, branding, marketing, and operations aspects of your franchise.
Based on the value of the building, the location, and your accord with the landlord, your Zostel franchise might cost roughly 30 lakh rupees. It will not be funded by Zostel but the periodic monetary incentive will be provided based on the performance of your Zostel compared to others.
Traveling is a kind of relaxation for all of us. But the fear of staying in filthy rooms makes our trip a bit less fun. Considering that, Zostel wanted to change the way we Indians have traveled and it has made its goal to deliver the best services throughout our staycation. They’ve done so by forming a powerful network of backpackers and entrepreneurs capable of ushering in a change.
In 2019, Zostel offered OTA, which allows them to earn a fee of 10% to 15% on each transaction. Both Zo rooms and Zostel work on a commission basis.
This is usually paid in one single payment after the franchise contract is signed. INR 2,00,000, including taxes, is charged by Zostel. Their commissions and monthly fees begin once the business is fully operational.
Depending on the operational ranking, they charge a flexible fee of 18-24 percent of the lodging income. They also don’t charge fees on meal and refreshment revenues or any other supplementary income of the business.
Royalty Fees
In certain franchises, the franchisor offers a franchisee special power to sell the firm’s merchandise locally in exchange for royalties. These royalties are usually calculated annually or quarterly as a proportion of the franchisee’s gross sales revenue. This recurring fee allows Zostel to offset the expenses of continuous benefits offered to its franchisees while still generating a return from its operations.
Site Assistance Fees
Site assistance fees, also known as a set-up charges, are charged to the franchisee by the franchisor, Zostel, for assistance in locating and establishing a crucial site. They provide some support in venue selection and formation, but the franchisee is normally in charge of the ultimate choice, which is up to the permission of the parent firm. They opt to reimburse these expenses as part of the franchise fee.
Ongoing Services
Zostel offers assistance to its franchisees, such as staffing a service center for scheduling bookings and building and operating an app that can be utilized to improve efficiency at all franchisees. For them, it serves as a supplementary income source.
Marketing
To reach a wider audience and assist each franchisee in becoming more profitable, Zostel invests in domestic or foreign promotional activities. As a result, profitability is increased and more funds are allocated to royalties.
Zostel – Challenges
Controversial journey
When Zostel introduced Zo Rooms, hotel aggregator company OYO rooms filed a lawsuit accusing Zostel of deception i.e. data theft. OYO took the case to court, which was soon resolved.
Following that, OYO rooms were in talks to acquire Zo rooms. OYO spent a long period looking into the documents of Zo rooms for acquisition purposes but ultimately opted not to buy them.
In return, Zo rooms filed a data theft lawsuit against OYO rooms, believing that OYO may utilize their information in the future. This acquisition battle went for 3 years and eventually, Zo rooms claimed victory over that.
Vulnerable industry
Zostel is entirely devoted to tourism. Micro and macro incidents have the greatest impact on the tourism business. Take, for example, the pandemic that wreaked havoc on the tourism economy. As a result, Zostel’s vulnerability will always be a challenge.
The mentality of people
Since Zostel provides cheap accommodation, people might think their services might be poor as well. The traditional concept of hostels being mostly for students hasn’t changed yet so it might take a while for people to get acquainted with this new idea.
Zostel received $1 million in funding in 2014. Recently, funds were raised on 25th July 2018 in a Venture series unknown round. Zostel’s recent investors are Orios Venture Partners and Presha Paragraph.
Date
Stage
Amount
Lead Investor
May 13, 2014
Venture Round
$1M
Presha Pargash
July 25, 2018
Venture Round
Orios Venture Partners
Zostel – What makes it unique?
The services offered by Zostel are similar to those offered by hotels, yet the experience is unique. In hotels, you may not have the opportunity to interact with other visitors, but at Zostel, rooms are shared, so you may connect with your roomies and learn more about their adventure.
The majority of Zostel’s are set up in natural settings. In this sort of environment, tourists feel more at ease and may openly converse.
So, the ultimate goal is to connect more individuals and provide them a memorable experience while staying within their comfort bubble.
Zostel – Competitors
Traditional low-cost hotels have long been a threat to Zostel, but the number of local hostels and homestays is fast growing. In India, there are over ten hostel chains with a national presence, posing a direct threat to Zostel.
The top 2 competitors of Zostel are:
Backpacker Panda
Backpacker Panda is a young, energetic firm with a vision of becoming a data-driven firm and revolutionizing the way Indians travel. The hostel brand has eight zones all over India, and its mantra of hygiene is often kept in mind.
Roadhouse hostel
Ambarish Raghuvanshi established it in November 2014. It operates in India from five different locations.
Final thoughts
In India, Zostel pioneered the backpacker hostel lifestyle. Zostel became a popular alternative for backpackers due to its unique strategy and high-quality services. Zostel’s services and experiences are unrivaled in their magnificent settings. As a result, they are a well-known hostel chain among travelers in India.
FAQ
What is the concept of Zostel?
The concept of a Zostel is that its is a hostel for backpackers. In Zostel there are shared rooms a common dining room, and a variety of enjoyable activities.
Who is the founder of Zostel?
Akhil Malik, Dharmveer Singh Chouhan, Paavan Nanda, Tarun Tiwari, Chetan Singh Chauhan, Siddharth Janghu, Abhishek Bhutra are the founders of Zostel.
Did Oyo acquire Zostel?
No, Oyo was in talks to acquire Zostel but later opted not to acquire them.
Oyo Rooms is the largest branded community of lodges presently running 450,000 listings in 5,000 towns in India, Malaysia, UAE, Nepal, China and Indonesia. The organization commenced its operations by constructing its enterprise version around the aggregator enterprise version.
Oyo rooms working model operates on the investment worth $1.7 Billion (modern investment raised on April 1st,2019). Meanwhile, the organization values $5.7 Billion with its headquarters in Gurgaon, Haryana. Oyo rooms offer their services in India in conjunction with worldwide locations like China, Malaysia, Nepal, the United Kingdom, the United Arab Emirates, Saudi Arabia, the Philippines, Indonesia and Japan with serving more than than 500 towns in India whilst running greater than 45,000 rooms globally as of January 2019.
Ritesh Agarwal, founder of Oyo Rooms stated that Oyo is now including 10,000 rooms or near 500 lodges each month below its franchise version. The shift in its enterprise version has additionally allowed Oyo to elevate its fee. Earlier, below the aggregator version, Oyo charged 18% fee from resort proprietors each month.
Moving to a franchise version had little or no effect on the pricing of rooms, the finance class of rooms priced Rs1,000-1,500 in line with nighttime will stay unchanged. The finances Oyo Rooms class below the franchise version will now fee everywhere among Rs1,000 and Rs2,500; the Oyo Town House class has a price range of Rs2,500 and above, and holiday houses below the Oyo Homes class will cost Rs1,000 in line with the room.
Oyo Rooms Dominate the Market by 68%
Earlier, the organization used to arrange the accomplice with lodges, rent a few rooms, and promote them below its personal logo. Even though the procedure remains the same, Oyo Rooms enterprise version has modified its path to a new structure. To preserve the logo image, they make the companion’s offer offerings at predetermined requirements whilst they lead them to greater visibility to their user-base.
Earlier the company used to rent lodges at a predetermined rate and supplied them to the customers at a take-up rate. This has been modified to a fee-based totally sales version. Oyo rooms charge a commission of 22% from its hotel partners. However, this commission does vary according to the services provided by the brand.
Agarwal was among the select few chosen for the two-year mentorship program run by Peter Thiel, co-founder of PayPal, early Facebook investor and the person who many name as the worldwide tech industry’s influential figure.
Since its launch in 2013, Gurugram-based Oyo has emerged as one of the biggest motels and rooms platform for travelers looking out no-frills, cushy lodging at much less expensive prices. While Oyo Rooms has modified lots over the years, tweaking and re-modelling of the unique industrial enterprise concept for Oyo, the middle concept is to attach travelers with motels.
The company has gone from budget hotel aggregator to a hospitality chain and a real estate business too. Oyo rooms cost a fee of 22% from its lodge companions. However, this fee does range steady with the offerings furnished with the resource of using the brand. The beginning started out on an asset-mild version however over the years, with investments throughout numerous companies inside Oyo, the organization has long passed from rate range lodge aggregator to a hospitality chain and an actual property enterprise too.
Oyo Rooms Business Model
The organization could rent the lodge rooms and revamp it to a standardized format, allow reserving through its website or application. However, in 2015, the organization started moving to a franchisee version, wherein, in choosing leasing rooms, it started out offering partnerships to motels. Here are the numerous verticals that Oyo has brought over the years.
Hotel room aggregation
Franchise version
Owned motels
Co-living
Hotel Room Aggregation
Oyo in 2016 had 5,855 motels in its community with a complete stock of over 68K rooms, while nowadays it has a portfolio of greater than 35K motels and 125K holiday homes, and over 1.2 Million rooms throughout 80 worldwide locations and 800 cities. Its verticals range from vacation homes, enterprise motels, casinos and co-working areas.
That boom has additionally been made feasible because of the fact that the startup saved iterating the version and ensured that it now no longer stays restricted to the rate range lodge space. With extra than one round of investment secured from maximum important traders which include Softbank, the startup ventured into extra modern classes and has continuously released new ventures or manufacturers below its umbrella.
Oyo Rooms in India VS China
Franchise Model
In 2017, Oyo CEO Agarwal announced that the organization has “developed its enterprise to a 100% extraordinary franchise, manipulate or operate. We no longer anymore do lodge aggregation and feature flip out to be a full-scale hospitality organization.” Oyo’s shift from lodge aggregation to franchise version were given here in particular to lessen its operational fees and to enhance serviceability, the organization stated.
For instance, Oyo Townhouse is deliberate and constructed throughout the needs and desires of millennial visitors beginning in particularly designed beds, TVs, open areas for conferences and greater. While merchandise like Collection O is a mid-scale enterprise lodge presenting larger and spacious rooms with pinnacle rate furnishing and linen, on-request laundry, limitless breakfast, 24X7 in-room dining, high-velocity WIFI workstations in each room etc.
These merchandises were a separate Oyo product, in which the organization rents out homes and renovates them based totally on the wishes and plans. So, overall, the organization has stopped reserving unique rooms for Oyo visitors, however alternatively, books the complete lodge or flat below its call and rents it out to customers.
Owned Hotels
Further, the organization gives its lodge companions the choice to run the assets both themselves or allow Oyo to run the operations. The organization additionally gives economic guide through its partnership with economic institutions that have allotted loans to greater than a hundred properties. Loans are to be had for upgrading space, operating capital and different wishes.
As in retaining a combined report with the resource of using Jones Lang LaSalle (JLL) and the Federation of Indian Chambers of Commerce & Industry (FICCI) the Indian co-living marketplace is predicted to boom at a robust CAGR of 17% within the subsequent 5 years. Identifying the marketplace opportunity, Oyo entered the phase in 2018 with Oyo Life, which operates a fully-provided condo housing arm of Oyo.
Oyo believes that the maximum important benefit of co-living areas, alternatively than paying visitors or serviced apartments, is that it notably cuts down the value of residing because of the fact now no longer handiest do humans proportion the lease however additionally revel in upload on offerings which include each day housekeeping, laundry/ on-name resident facility control; curated meals, etc.
Oyo works with big builders and impartial asset proprietors to take over a whole building, tower or an impartial house. Oyo Life isn’t an aggregator and takes obligation for a stop to stop control of areas, rent whole homes, furnish, clean rework.
Trivago is a hotel search platform, whose main focus is to reopen the way travelers compare and search for hotels online. During this process, Trivago Hotels enables advertisers to expand their business, giving them access to a large consumer base who visit their platforms via a website or app.
Trivago was conceptualized in the city of Düsseldorf, Germany in the year 2005. The hotel aggregator was started by three university friends, Rolf Schrogmens, Peter Vinnmeier, and Stephan Stubner. Similar to the majority of start-ups, the initial foundation of the business was laid from a garage.
Besides, one of the 2006 founders, Stephen, decided to pursue a career in education, so Malte Sievert became part of the founding team. Trivago’s top management includes CEO Rolf Schrogmens, CFO Axel Heffer and COO Johannes Thomas.
Trivago started its operations in Germany and soon after the company started, it gained momentum and grew in various markets. At its launch, Trivago partnered with OTA (online travel agency) to meet its demands, following its objective of successfully showing information to consumers.
The hotel aggregator collected data from large hotels to littler organizations and showed it properly to hotel seekers. The company focuses on accumulating information from reliable sources so that customers can always be provided with reliable and most satisfactory services.
Also, features such as filters and sorting functions allow every traveler to find the most ideal hotel room at the location of their choice. Trivago is equipped with a highly robust and robust server infrastructure, giving the company the necessary data center that will meet Trivago’s high-security standards, reliability as well as flexibility. All these features give its visitors and search engines the ability to search for direct and fast results for hotel rooms.
Growth Of Trivago
Over the years, Trivago has developed extensively. Starting its operations from a garage, the hotel aggregator now employs about 5000 employees in its various offices worldwide.
Trivago came with its first advertising campaign in the year 2008–09 when most travel organizations were not doing brand promotion. Trivago ran an effective TV advertising campaign in his native Germany.
The proceeds from the brand promotion campaign were used by Trivago to expand its operations in Europe which is one of its most popular and successful markets to date.
The hotel aggregator started its operations from Germany and to date, it has achieved tremendous growth with presence in over 190 countries of the world. It attracts over 120 million visitors to its platform every month and is now rated as the largest hotel search website in the world. Currently, Trivago analyzes 900,000 hotels in 33 different languages from over 250 placements across the month.
Over the years, Trivego’s customers have given more than 150 million hotel reviews with over 17 million photos. At the end of last year, the hotel aggregator provided more than 14.6 million bookings for the budget as well as luxury hotels. Besides, Trivago is one of the most successful and fastest-growing start-ups, not just in Germany but worldwide, whose profits have been growing manifold since 2008.
Services Provided By Trivago
Using Trivago’s Hotel Manager, hoteliers can list their hotel through a profile on the Trivago website. Registration is free through the simple online form. Trivago Hotel Manager Basic is completely free to use, allowing you to list your hotel and benefit from the increased risk.
For an even more advanced triangle profile, you can join the Hotel Manager PRO. This takes you one step above the original version by highlighting your contact details to enable hotel news prominently on your profile and encouraging viewers to contact you directly through your website or phone number.
It also provides you with advanced analytical tools such as viewing visitors’ profiles and competitor data so that you can target your audience more effectively.
Once you are registered with the Trivago Hotel Manager, you can assign your hotel to your hotel profile. You can add it if the hotel is not already on Tivago’s list, although it takes up to seven days to get approval. You can manage multiple hotels in your account with an easy-to-use dashboard.
Once you have added your hotel, add detailed information, including contact details and eye-catching images, so that your hotel is attractive to visitors and arrives in relevant search results.
Trivago provides professionally written hotel descriptions for every hotel. These feature high-quality keywords to attract web traffic. Hotel reviews from other booking sites are automatically collided by Trivago search robots, contributing to the overall rating score for each hotel. Trivago also offers a rate connect service. This allows you to set up competitive cost-per-click advertising campaigns, track your performance, track through analytics, and control your marketing budget for the best success at the lowest cost. The service pays a set fee through an initial consultation.
Trivago Business Model
Trivago Business Model
Customer Segments
Trivago has a multidisciplinary business model. It mainly consists of two separate customer segments that are required for operations. It is to register brands that make their services available online to consumers who compare services as well as their prices to facilitate the purchase decision.
Value Proposition
There are mainly four primary value propositions that Trivago offers, namely access, customization, convenience, and brand/positioning.
The online hotel aggregator initially reduces accessibility by only enabling its customers to contribute to the content of their website. Also, they are motivated to add lodging brands and text descriptions. Complete the missing profile, as well as edit the profile to ensure the quality of the content.
The website promotes customization only by allowing brands on its platform to personalize their user profiles. The facility is offered by allowing visitors to find hotel rooms and compare prices according to brands.
Trivago offers a free app for its hotel search product on both mirrors and Android. In addition to the hotel search feature, the app provides proximity and interactive maps to the user’s current location.
The Trivago app is listed in Mashable’s 25 apps to save you money, USA today’s 10 best apps for booking your stay, the independent app in Ireland to save you time and money, and Australia’s News.com.au as one of the top apps to take on vacation.
Trivago Referral Revenue
Methods of earning income, a commission from hotels listed on Trivago sites, called revenue, when the user clicks, include Trivago subscription fees paid by hotels for services provided by Trivago’s business model. Trivago outbound Fee is a global hotel search platform.
According to Trivago, its mission should be “the traveler’s first and independent source of information to find the ideal hotel at the lowest rate.” Users can access Trivago in 55 local websites and applications and 33 countries.
Trivago combines hotel content from various sources on its platform. These hotels are then displayed to users based on their search criteria. Trivago also claims to help users achieve the best rates by providing comparisons to over a million hotels on over 250 booking sites.
However, users cannot book on Trivago, they can only select the hotel. For booking, they are redirecting to traditional OTAs (online travel agencies) such as Trains (PCLN), CTRP.com, and Expedia, from search results in a particular hotel.
Trivago Revenue Generation
Trivago Geography Split
Trivago has classified its revenue into three geographical regions, America, Europe and the rest of the world. For the nine months ended September 30, 2016, the US constituted 38.2% of Trivago’s revenue, Europe constituted 47.2%, and the rest of the world constituted 13.6%.
It compares hotel prices to 700,000+ hotels. Nearly 5 million monthly visitors reach the site, which reaches the hotel platform. Strong support by Expedia, a leading name in the travel industry, has 50 international forums.
Weakness Of Trivago
Limited product offering. It only covers hotels and thus, does not cater to all aspects of travel. General competition means limited market share and low brand loyalty.
Opportunities For Trivago
Acquisition of online travel booking portal to expand its portfolio. Increased interest in travel tie-ups with more hotels may increase their presence.
Threats For Trivago
Expanding its portfolio to add flight, car, and bus booking facilities, Flight-Plus Hotel’s combo packages presented by various portals are a major threat. The popularity of online travel portals erases a significant market share in India.
Listing to your hotel on Trivago’s website allows you to see more than 120 million monthly visitors. It also shows overall reviews for your hotel from several booking sites. Depending on your hotel specialty on Trivago, you will reach a global audience of relevant travelers looking for a place to stay during your next travel adventure.
Initially, Trivago received one million euros from angel investors – Christian Vollmann and Florian Hahnemann.
In the year of 2008, Trivago decided to take the help of TV commercials to develop its business. This move was because the top management believed that solely based on Google and other search engines to promote the business could prove unsafe in the long run.
Over the last 11 years, Trivago has been tasting success and expanding. The organization, which had funding of just $ 1.4 million in 2008, was able to achieve revenue of 1.035 billion by the end of 2017.
The hotel aggregator entered the US market in 2012 and entered into a joint venture with Expedia, an American travel organization. Expedia acquired a 61.6% stake in Trivago for the $632 million in the year of 2013 and thus claimed the majority of the organization’s stock.
In the same year, Trivago entered the Asian market and India became the first country to operate in Asia.
In December 2016, Trivago achieved another feat as it was successfully listed on the symbol of the NASDAQ TRVG ticker. By that time, Trivago had hired over 1000 employees in its various offices worldwide. Traffic on the Trivago continues to increase with each passing year. And, compared to the previous year, Trivago’s traffic expanded by 25% in the year 2018.
Trivago has been acquiring large and small businesses for the past few years and its most recent acquisition was TripHappy for an undisclosed sum in May 2018.
Frequently Asked Questions About Trivago
Does trivago mean anything?
Trivago stands for Trip Vacation and Go.
How does Trivago get its data?
Before running a campaign, advertisers need to provide an import feed containing all hotels they want to be advertised on trivago. trivago will import the advertiser’s hotel inventory into the trivago database and based on the provided data, the hotels will be mapped to the corresponding trivago properties.
Who is trivago owned by?
Trivago is owned by Expedia Group.
How much does it cost to advertise on trivago?
Registering on Trivago for advertising is for free and claiming business area is also free. Using Trivago business studio you can monitor your business profile as well as optimize your hotel profile for free.
Does Trivago have flights?
Trivago does offer search services to travelers for One-Way flights, Round-trip, and Multi-City flights.
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Just when we thought the hospitality industry couldn’t get any better and automized, Siddharth Goenka launched Aiosell Technologies in 2019. This venture is all about automated pricing & revenue management for hotels, combined with an all-in-one integrated hotel marketing platform.
The hotel industry is still using archaic systems with static prices and independent systems that do not integrate well with each other and leaves money on the table. Aiosell aims to solve the vision of maximizing revenues for the hotel industry, using automation, AI, and integrated technology systems. The owners of the Aiosell are hotel owners themselves, and hence this company was born out of a need in their own business. When they realized, there wasn’t a suitable alternative available in the market solving these issues, they decided to build a technology solution.
The product of Aiosell uses several automation and AI algorithms to change prices in real-time to ensure the hotel gets the maximum business. When the demand is high, the price increases and vice versa. The system uses many other unique parameters to adjust these prices, including occupancy, demand, seasons, weekday, booking window, dates, etc.
The USP of the product is to use all these products in a very simple, easy to use method to automate dynamic pricing and simplify revenue management. The product also integrates all aspects of hotel marketing together to give a one-stop-shop marketing product for hotels.
The product started off using a simple pricing automation tool. Today, it includes all technology components of the hotel industry including Rate Shopper, Reviews Manager, Website & Booking Engine, Analytics & Reports, Travel Agent portal, etc. This pivot was made because the team realized that many hotels could not only use one aspect of hotel marketing, it needed to integrate all these aspects to give the best results.
Aiosell’s target market consists of independent and chain hotels of all sizes (5 stars, 3 stars, 1 star) and home-stays & apartments that use online channels to get bookings for the hospitality industry.
There are about 6 million hotels only in the organized segment. Adding the unorganized segment and home-stays, this number can go above 10 million. Over the years, this number will only grow with more alternate accommodation being added to the supply.
“Since this is a highly fragmented market, our market share targets will be less than 1% of the market, which is a sizable opportunity for a B2B business,” said Siddharth Goenka, founder of Aiosell.
Aiosell Technologies – Founders and Team
Siddharth Goenka is the Founder & CEO of Aiosell Technologies.
Siddharth Goenka – Founder, Aiosell Technologies
He is a Software Engineer from Purdue University and an MBA from the Indian School of Business, Hyderabad. He has previously worked in Microsoft as Software Developer and in Accenture as Management Consultant. Then, he went to join his family business and conceived Octave Hotels, a business hotel chain that grew to 7 hotels in 3 years. Siddharth brings a mix of software development, hotel owner, and marketing professional experience which is key to Aiosell.
Team of Aiosell Technologies
The co-founder of Aiosell Technologies is Smriti Singh, whom Siddharth met because her husband was Siddharth’s boarding school friend. She is IHM, Bangalore graduate and was ex Revenue Manager at ITC hotels.
Siddharth looks after the overall product development, vision, and overall growth of the business. Smriti looks after client satisfaction and success. The team comprises 15 members, the average age of the team is 23 years. The culture at Aiosell is very young, energetic, flexible, and innovation-driven.
Hiring funda at this company is based on two pillars – attitude/potential, and honesty/ethics. Competence is given some weight but not very weightage, as that can be developed in other two qualities are present.
“Since we were in the hospitality industry, this was a need that was glaringly visible in the industry. The industry was rapidly changing with an increase in internet bookings/smartphone usage and changing customer behavior.” Added Siddharth Goenka, owner of Aiosell Technologies.
They were first trying this idea out manually using excel sheets, and when they succeeded, the team decided to make an automated product around it. For one year, they ran the concept manually with a service-led model, and when they were confident of the benefits involved, they changed it to a product-based approach.
The initial people they spoke to were friends and family in the hotel industry, who were new to the online business and had not wrapped their heads around increasing their hotel revenues digitally.
Aiosell Technologies – Name, Tagline, and Logo
AIOSELL – AIO means all in one, and also a pun on artificial intelligence ‘o’ttomation. The name and logo for this B2B company were formed based on some initial research and brand name availability.
Aiosell Logo
Aiosell Technologies – Startup Launch
At Aiosell, product first – marketing second is the approach, rather than the other way. Make the product so unique and desirable, that it starts selling itself. Aiosell has several partnerships with other technology companies and revenue management companies, who provide complimentary services or products to its offering.
The company has formed revenue-sharing arrangements with these companies to grow. The team has now also started attracting leads through traditional product marketing channels like Google, Facebook, Linkedin, and Youtube.
Aiosell Technologies – Business Model and Revenue Model
The business model of Aiosell is SaaS/subscription-based. The listings at Aiosell are priced anywhere between $5 to $10 per room per month. Like in any Saas model, margins are more than 30%, and currently, it has got the business organically without burning a lot of cash.
Aiosell Technologies – Startup Challenges
One major challenge that Aiosell faced was to convince a large chain of hotels to try and use the product. This was accomplished by offering them free trials and personal attention by the founder, Siddhart Goenka. It was also followed by ensuring all their requirements kept getting back into the product development cycle so that the customer was satisfied. Word of mouth references from happy customers is the most relevant marketing channel to grow the business.
Aiosell Technologies – Funding and Investors
In June 2019, Aisoell technologies raised an amount of INR 10,00,000 through an early stage self-funded round.
Aiosell Technologies – Growth
150+ hotels located in 10+ countries and 100+ cities
Revenue generation- $20,000 per month ($250,000 per year)
Profit margins are as high as 20%.
Customers across India, Thailand, Malaysia, Singapore, Philippines, Russia, Kenya, Belarus, Greece, USA, and Canada.
Aiosell Technologies – Future Plans
“We want to grow to 500 hotels in 1 year and 5000 hotels in 3 years.” Concluded Siddharth Goenka while talking about his future plan.
