DON ’ T IGNORE OYO
TRENDING
DON ’ T IGNORE OYO
‘ EVERYTHING ’ S A
POSSIBILITY ’
“ Jokingly and internally , we ’ re calling it Six Senses version three ,” says Neil Jacobs , CEO of Bangkok-based Six Senses Hotels Resorts Spas . IHG ’ s US $ 300 million purchase from Pegasus Capital Partners puts Six Senses at the top of its luxury portfolio . Jacobs spoke with HOTELS after the deal , which doesn ’ t include real estate , closed . HOTELS : Do you see your pipeline ticking up ? NEIL JACOBS : Part of why IHG was interested in us is because our pipeline is unbelievable . When you ’ ve got 18 hotels , to add another six is unbelievable , right ? Even alone without IHG , we would be at 40 hotels ( globally ) in three to four years just with what we ’ ve got . H : Do you see Six Senses complementing or strengthening IHG ’ s wellness offerings ? NJ : We have a very strong wellness and sustainability platform , probably stronger than most , particularly given the size we are . But we do have some scale with it and we ’ re able to drive it . And we love to create . We have this incubator of innovators around wellness and sustainability … We think there ’ s great potential to provide some of that skill set and experience to other areas of the IHG world if they want it . H : Have you considered adding another brand ? NJ : I have . I think everything ’ s a possibility , and if ever I would do something else in this career , I would probably want to do a 3- star brand – but make it so interesting and so cool and take some of the values of what we do . The one thing nobody ’ s done really , really very well is make wellness truly accessible to people who don ’ t have huge amounts of money . It ’ s generally that the best rendition of wellness programs are in very expensive hotels . And fundamentally , I have difficulty with that . Most 3-star hotels are not especially innovative or have real purpose . And the few that are starting to – they ’ re all kind of cool , but where ’ s the rest of the narrative ?
And for me what ’ s interesting in that segment is to redefine a narrative that embraces some of the values that we have at Six Senses around wellness and sustainability and content , you know , but do it in a way that is affordable .— Barbara Bohn
India ’ s Oyo Hotels & Homes has 515,000-plus rooms in eight countries . Hotelivate Chairman Manav Thadani says traditional players shouldn ’ t dismiss Oyo , which operates franchised and leased assets — and which recently received a reported US $ 150 million to US $ 200 million investment from Airbnb .
More flexibility on brand standards . While I am not undermining the importance of guidelines to ensure consistency , I see merit in Oyo focusing more on the basics than the frills . A clean and safe accommodation , with a comfortable bed , adequate technology , perhaps suitable dining options and trained staff is all one really needs – especially in the budget-to-midscale segment . Yet , typical franchise and management contract negotiations can extend to up to 18 months , with considerable back-and-forth between owner and brand . In contrast , signing up with Oyo could take as little as 10 days .
Emphasis on technology . Traditional chains have consistently lagged in this area . Oyo focuses on reducing operating costs and improving serviceability , and attracting travelers and bookers with a user-friendly platform . It has a dedicated software and engineering team that churns out new apps and updates on a daily basis .
Low reliance on OTAs . Over 93 % of demand comes through Oyo ’ s own channels , including the website and mobile app . Repeat customers generate about 73 % of revenue . This can be attributed to a seamless product experience , efficient operations and solid distribution capabilities .
Oyo entered the hospitality industry as a disruptor , without a template , and it is trying to overcome its share of issues , especially related to service quality , transparency , low margins and a massive quarter-on-quarter cash-burn in the interest of scalability . Looking at the leadership ’ s desire to constantly improvise , these could iron out over time . For now , we are simply surprised by the way a model that has proven itself sustainable is so easily dismissed by the rest of the industry . We say , do so at your own peril !
16 hotelsmag . com May 2019