Analyzing OYO's Growth and Recommendations for Future Success
Explore the founding and growth of OYO, a venture-backed company with ambitions to go public. Delve into analysis, recommendations, and financial insights suggesting pursuing a job at OYO. Discover the company's strategy and indicators of success in the US market, emphasizing high occupancy rates and room rates to drive profitability.
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Presentation Transcript
A Future at OYO: Check In or Check Out? Prepared exclusively for Jakayla Michel ALAN NAPIER | ASHLEY BRUNER | JUSTIN BOSLEY | RYAN MCCARTY JANUARY 7, 2020
Agenda Overview of OYO Recommendation Analysis of OYO Financials Implementation
Overview of OYO Founded in 2012 by Ritesh Agarwal Secured large venture capital funding Experiencing rapid growth Recent entry into U.S. markets Goal to issue IPO
Background Recommendation Analysis Financials Implementation Recommendation Pursue a job at OYO Wait to pursue a job at OYO
Background Recommendation Analysis Financials Implementation Recommendation Pursue a job at OYO Wait to pursue a job at OYO
Background Recommendation Analysis Financials Implementation Indicators of OYO American Success Selling their product as a service Strong appeal to millennials Profitability in the US
Background Recommendation Analysis Financials Implementation Analysis OYO s goals Hotels in the US Estimated commission revenue, Jul Dec: $41.4 million 1000 920 900 800 700 620 600 Estimated signing revenue, Jul Dec: $43.5 million 500 380 400 300 200 200 140 80 100 50 0 June July August September October November December
Background Recommendation Analysis Financials Implementation Analysis Burning Through Capital Before OYO: After OYO: $60 per night Average 66% occupancy $14,454 annual revenue per room $15 per night Average 95% occupancy $5,201 annual revenue per room
Background Recommendation Analysis Financials Implementation Analysis Decision Criteria Does OYO s strategy make sense? Global strategy is sustainable American competitive advantage is challenged Probability of American success Higher average occupancy rates to top Higher average OYO room rates to compensate Results in burning through capital Probability of global success The business model works in underdeveloped countries Selling tech as a service would allow global expansion
Background Recommendation Analysis Financials Implementation Financials: Assumptions High Growth Potential Global Brand Recognition $1.8 Billion in Funding $300 Million to the United Stated 30% US Market Share Viability
Background Recommendation Analysis Financials Implementation Financials Expected Revenue 1600 1400 1200 1000 800 600 400 200 0 2016-2017 120 2017-2018 416 2018-2019 1481 Expected Revenue Expected Revenue
Background Recommendation Analysis Financials Implementation Financials
Background Recommendation Analysis Financials Implementation Financials Developed Market Competition Unexplored Market Costs
Background Recommendation Analysis Financials Implementation Financials
Background Recommendation Analysis Financials Implementation OYO s Path Forward US Market Add an average of 5 hotels per day
Background Recommendation Analysis Financials Implementation Timeline (Short-Term) 2019 2020 US Market Opens >50 hotels Gains $300k in Investments Open 5 hotels per day
Background Recommendation Analysis Financials Implementation Marketing Actions Website and App Average of 350,000 daily visitors 10 million app downloads Search Engine Optimization (SEOs)
Background Recommendation Analysis Financials Implementation Risks & Mitigations Entering the US Market Targeting the budget hotels Open 5 Hotels per Day Invest portion of their capital Unexpected Occupancies Marketing via website and mobile app
Background Recommendation Analysis Financials Implementation What to Watch For If the company decides to sell product as a service If the amount of website and mobile app visits increases
Background Recommendation Analysis Financials Implementation Summary wait to pursue employment Key indicators of US success: Appeal to millennials/successful marketing campaign Selling technology to other US hotel chains US profitability Benefits to waiting: Mitigate risk of US failure More attractive opportunities may exist
Questions? THANK YOU
