WHAT ’ S HOT
D E V E L O P M E N T
WHAT ’ S HOT
D E V E L O P M E N T
DISRUPTION FEEDS
NEXT-GEN ’ S
WAY OF TRAVEL
Public space at the Selina Medellin , Colombia
The old adage about there being more than one way to skin a cat comes to mind when considering two disruptors : Oyo Homes and Selina . Both have frothy values and are currently spending more than they are making , but they also have the ability to create unique and alternative experiences .
Oyo Rooms , the India-based hybrid , is leveraging technology to quickly and cheaply convert and brand a huge number of fragmented economy hotels overlooked by the industry giants that don ’ t want to play in the most budget of budget segments .
Another low-cost startup , Selina , is a hostel , private room mix for the emerging “ digital nomads ” who don ’ t like offices and want to connect with the world . It focuses on co-working , recreation , wellness and local experiences . And it ’ s cheap , with beds selling for an average of US $ 20 to US $ 30 at its initial units in South America , while F & B and other services account for 30 % to 60 % of revenue .
Selina operates about 46 properties in 13 countries , with over 22,000 beds open or under conversion , and with US $ 225 million in funding it boasts plans to reach 130,000 beds and over 400 properties by 2023 . It takes 20-year leases and has a lot of potential to add content and work with any number of property types , with conversion costs of between US $ 3,000 and US $ 5,000 per bed .
“ As we ’ ve seen in co-working and ridesharing , millennials and Gen Z are redefining how they want to live , work and explore the world ,” says Selina co-founder and CEO Rafael Museri . “ The ambitious and adventurous nature of these generations prove that there is a demand for our experiential hospitality model today and for years to come .”
Oyo has raised nearly US $ 2 billion in capital to fund its plan . Founder Ritesh Agarwal says Oyo could be the world ’ s biggest hotel company , already stating it has more than 500,000 rooms in a system that is less than five years old . In
2018 , Oyo claims it booked more than 75 million room nights .
Its strategy is to keep the value proposition simple and affordable , and easily booked via an app . Guests get a clean , cheap room with simple brand standards .
Oyo also says it can bring new units onboard in two weeks with an artificial intelligence-led design approach and an app to quickly determine needed upgrades to flooring , plumbing , HVAC , etc ., as well as project budgeting , contracting and tracking for all the stakeholders .
Agarwal says more than 75 % of hotel owners associated with Oyo Hotels have seen a 20 % to 30 % jump in occupancy , 2.5 times higher RevPAR and significant gains in profit . That speed , and those results , have powered Oyo ’ s astounding growth . “ It may sound crazy , but I think they could grow out to have 5 million to 7 million rooms in the next six to seven years ,” says consultant Manav Thadani of India-based Hotelivate . — J . W .
30 hotelsmag . com June 2019