Oyo Hotel’s Expansion Spree: Too Much, Too Fast?

Abstract

Established in 2013, Oyo Hotels & Rooms, an Internet startup in the Indian hospitality sector, experienced an astonishing journey, culminating in a valuation of USD 5 billion by the end of 2018. The remarkable success of Oyo left many observers astounded. This meteoric rise was attributed to Oyo’s innovative business model, strategically targeting the fragmented budget segment of hotels beset by inefficiency. Oyo addressed these challenges by providing access to hotel rooms in prime locations, ensuring standardized services and offering affordability to customers. Over the years, Oyo gradually diverged from its core business as a mere aggregator of hotel rooms. It ventured into leasing hotels in the mid and premium segments, tapped into the Indian wedding segment, acquired companies and expanded its footprint into numerous foreign markets. This case aims to scrutinize whether this accelerated growth strategy could compromise the fundamental service promise of standardization. Additionally, it investigates whether the financially robust company, particularly after securing a USD 1 billion investment in September 2018, risks losing touch with reality as it becomes entangled in various controversies.