Home / Companies / Start-ups /  Oyo builds tech arsenal to cope with expansion

New Delhi: Oravel Stays Pvt. Ltd, which has over 8,500 properties affiliated to it under the Oyo budget hotel brand, is revamping its technology capability to keep up with its domestic and international expansion plans.

Oyo, for instance, launched a development centre in Hyderabad in September. Until then, “we were primarily based out of Gurgaon", Anil Goel, chief technology officer (CTO) of the Gurgaon-based company, said in a recent interview. All this expansion, he explained, necessitated a bigger tech team. The company’s technology team comprises about 150 engineers. By the end of 2018, “the team will grow to 400 engineers", said Goel, who also wants to set up a “centre of excellence" focused on machine learning, artificial intelligence (AI) and other newer technologies that have “a significant play for us" in improving customer experience and operations.

Oyo, according to him, primarily follows an in-house software development strategy for running the core business—enabling smooth running of hotels via the Oyo network. For other operations and internal functions, human resources and financial reporting for instance, the company uses “off-the-shelf" products from tech providers such as Oracle Corp. and SAP SE.

Since the hotel chain operates “at the intersection of real estate, hospitality and technology, tech is central to everything we do at Oyo. We have 20-plus technology products for each aspect of our business", according to Goel.

For instance, a property management solution (PMS) from Oyo gives the hotel chain control of all property operations, including check-in, check-out, guest issues, and guest-ordering services such as food and beverages, said Goel. Further, Oyo also has “a number of consumer applications, including the fastest consumer mobile application that lets users book a stay in three simple steps in less than five seconds".

To check on the quality of hotels in its network, Oyo has an auditing application called Krypton, which allows it to manage the guest experience by guiding the auditors to do targeted and random audits. To audit a property through Krypton, an Oyo auditor visits the property and captures answers to specific questions related to property upkeep, Goel explained.

Orbis is another app which is used by its business development managers. “It guides them on the demand patterns on the network and helps them identify target properties in different areas. It thus enables them to negotiate with and onboard those properties," said Goel.

The company has a separate application for corporate travel that is used by its travel agent affiliates. Besides, Oyo has enabled virtually anyone to become a travel agent—including college students and office workers looking for extra income—through an app called Mitr.

To manage the complexity arising from a diverse set of hotel owners and operations spanning 230 cities across India, Malaysia and Nepal, Oyo has opted for a cloud computing model to host its applications—thereby saving on capital and allowing it to be more agile technically. “Oyo is 100% on cloud and all our infrastructure is on AWS (Amazon Web Services) across multiple availability zones," said Goel. He added that the company works closely with its affiliates and property owners, involving them in product development and incorporating their feedback in new app features.

“About 95% of the demand (for rooms) comes through our own (distribution) channels and the largest chunk out of that comes through the website and mobile apps. We also get bookings through our call centre," Goel said.

Big data analytics, according to Goel, is one of the foundations for Oyo to understand customer behaviour, as it generates “hundreds of gigabytes of data" on a daily basis. This helps Goel and his team also “understand demand patterns and maximize the occupancy rate in hotels by dynamically changing pricing". For analytics, Oyo uses a combination of a data warehouse built in-house and open-source softwares such as Hadoop, Hive and SQL databases. It also uses third-party tools such as Tableau and Silk.

Oyo undoubtedly faces a tough challenge for the larger hotel chains, say analysts.

“While Oyo has been attempting that (data analytics), they are not able to match the big hotel chains because, usually, the property owners are not willing to share customer data with Oyo," said Sanchit Vir Gogia, chief analyst, founder and CEO of Greyhound Research. Calling Oyo “a disruptor when it started", he is of the view that over time, the entire premise of Oyo has been “weakening".

“If you look at the Starwoods and Hyatts of the world, they have been using a ton of technology to understand customers and serve better deals to them. This is something that Oyo has not been able to counter," said Gogia. The large hotel chains, according to him, use customer data from multiple sources to know about their dining or stay experience and offer them standardized yet tailored experiences across properties. Also, he said, Oyo’s main customer base is budget travellers, who do not spend much on in-room dining and other services, which is where hotels make the most money.

Gogia also asserts that in terms of tech spend and usage, it is not just Oyo but Indian hotel chains in general that fare poorly compared to their multinational counterparts. “They typically spend 0.1-0.5% of their revenue on technology whereas the ideal situation would be 2 to 3%," he said. However, he added that the annual technology spending in the hospitality segment in India is growing at a relatively fast pace of 30-35%. “Hotels are increasingly looking at emerging technologies such as AI and virtual reality," he added.

Goel, on his part, noted that Oyo is experimenting with Amazon Echo for voice and digital locks at the hotels. “We are also using chatbots for customer queries and recently worked on an integration with WhatsApp for bookings and location guidance—one of the first companies to do such API (application programming interface) integration," he said.

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