OYO Townhouse begins with an aggressive push in Bengaluru
As you walk along the busy 12th main road in Indiranagar, Bengaluru, an ash grey building with a bright red front door welcomes you with the logo of OYO Townhouse. It has been a few months since OYO announced the launch of its new vertical OYO Townhouse. Today, the Softbank backed budget-hotel aggregator launched its seventh Townhouse in Bengaluru.
The move by OYO was seen as a bid to ensure that they have complete focus and control on the quality and end user experience. In late 2015, after a viral post by one of the OYO customers, the need to ensure better service quality became a necessity for the budget hotel aggregator.
Starting Townhouse
In a conversation with YourStory, Abhinav Sinha, Chief Operating Officer of OYO, says:
“The idea of OYO Townhouse is to have control and craft experience for the customer from scratch. We realised with our experience that the budget hotel was broken and there always is a compromise in terms of variables of location, comfort, and pricing. In order to control all three aspects, we started OYO Townhouse.”
Sitting in one of the reading rooms of the OYO Townhouse, Abhinav says that the idea of Towhouse is an evolution of what OYO always wanted to do. The planning for OYO Townhouse has been on for over a year now.
In Bengaluru alone, the team intends to open over 25 Townhouses across different locations in the city and over 250 Townhouses across 12 cities by the end of the year. Currently, OYO has leased the properties from its existing partners and refurbished the same. The focus is on a unique branding proposition.
Focus on the customer
“The colours are bright, the focus is in giving the experience of a hotel, café, home, and store under one roof. All Townhouses are built keeping the millennium traveller in mind. We have several data points that add that most millennial traveller prefers booking on the go and there is that option for an OYO Townhouse. The idea is to infuse the perfect blend of technology, service, and convenience,” adds Abhinav.
The locations of the Townhouses are also chosen basis keeping the neighbourhood factor in mind. Most of the localities are business hubs. With the Townhouse, OYO enters into the mid-budget segment category. The rooms are priced from Rs 2,500 and go upwards. The pricing Abhinav adds are dependent on the location, time-frame, and seasonality.
Becoming a hotelier
Currently, OYO has created a brand template specifically for OYO Townhouse, has hired international and national brand experts, to ensure uniformity. Abhinav adds that it took them about 30–40 days of construction and refurbishment work.
Apart from offering all the amenities needed, Abhinav says that the end experience is what matters. In terms of ensuring that a consumer gets a complete experience at a Townhouse, the space has conference rooms, cafes, and lounge areas.
OYO undertakes complete operations of these units along with interior and exterior construction with a group of highly qualified architects and structural engineers. Abhinav adds that each room of Townhouse was at an approximate price of Rs 3–4 lakh.
Breaking completely away from OYO’s marketplace model, Townhouse follows a full-stack hotelier model. This meant, hiring people with certain capabilities and internally reorienting themselves to becoming an hotelier. Abhinav explains,
When you are reorienting a team of 1,700 people, it is like moving a big ship. But the experience was great and easy because it trickled down from top. Ritesh (Agarwal) was the first person to join the skills training course, followed by the whole leadership. This included every minute detail of transformation. From how doors are opened, receptions are managed, to how you talk to a customer on the phone.”
The space
Does this mean that OYO will move away from the marketplace model? Abhinav clarifies that the marketplace model will continue to exist. While there are different teams managing Townhouse and the marketplace, the leadership teams are the same.
In its marketplace model, OYO has partnered with 500 hotels with over 6,000 rooms in Karnataka. The platform is available across 200 cities in India, Nepal, and Malaysia and covers over 70,000 rooms. OYO also recently launched OYO Captains, a concierge service.
OYO recently raised an additional funding of $350 million from Softbank and has Sequoia Capital, Greenoak Capital, and Lightspeed Ventures as its investor. According to reports, currently the OYO marketplace is competing with the likes of MakeMyTrip. Townhouse is also OYO’s way to stabilise in the market. In this Townhouse model, it competes directly with the likes of Matrix-backed Treebo Hotels.