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Why Brands Are Investing Big In OYO

| Published on April 30, 2019

Changing the dimensions of the hotel industry, OYO Rooms founded 5 years back has now emerged as India’s largest hotel chain. 

Time and again OYO has made headlines with some of the biggest companies investing in the hotel chain with the latest being Airbnb who invested $75 million in the company. 

So what is it that attract these huge money making companies to invest in OYO?

Index Score of OYO

According to YouGov BradIndex, the daily brand-health teacher show a significant improvement in the Index Score for OYO, which is an average of impression, quality, value, reputation, satisfaction and recommended scores. 

How OYO Improved it?

OYO raised $250 million in september 2017 mostly from SoftBank Vision Fund which helped them improve their Index score which was 16.7 at the time considerably between October 2017 to February 2018. 

Fall and Growth of OYO Index Score

Though in the period between March-April 2018 OYO witnesses a decline in its Index Score but was successful in stabilising its score to an extent. 

The company yet again faced a slump in September-October 2018 which was also the same time when they checked into the Unicorn club with $1 billion fundraise. 

After Unicorn Status Phase

Despite all the ups and downs, OYO recorded a steady improvement in its overall brand health and made it to 20.5 points in March 2019 from 18.2 in September 2018.

Overall, OYO has seen an improvement in its purchase funnel in terms of awareness (whether one is aware of a brand), consideration (whether one would consider purchasing from the brand) and usage since April 2017. 

Interestingly where the category of online hotel booking has seen a decline in the past 2 years. OYO seems to have made an improvement. 

Conversion Rate of OYO

Conversion rate from Consideration to Usage for OYO has increased from 67% to 71% during April 2017 – April 2019 while for the overall category it has dropped from 55% to 52% conversion in these two years.

The Consumer Dimension 

YouGov BrandIndex data shows that, Consideration as well as Purchase Intent for Oyo seem to show a stronger correlation with the Recommendation metric than Value for Money metric. This suggests that Oyo’s strong brand advocacy among consumers could be driving the success for the brand in this category.

OYO’s Driving Force

OYO has over the years worked towards making the experience of its consumers better by effectively and efficiently improving its health metrics. 

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