OYO VACATION HOMES

(OYO acquires Leisure Group)

 Prepared by
GUIDED BY
Shreya Bhandary(02)
Professor Sumeet Paradkar(31)
Dr. Purvi Sanchita Choudhary(40)
Pujari Gayatree Yadav(55)
Vishal Dhumal(05)
 • FOUNDER: Ritesh Aggarwal
• FIRST BUSINESS : ORAVEL in 2012 ---------> OYO in 2013
• He always felt that the biggest problem people in India while travelling
face is to find affordable hotels to stay in and are not able to get very
History of basic facilities from the hotels.

OYO • The portfolio combines fully operated real estate comprising more
than 43,000 hotels with over 1 million rooms. Through its vacation
homes business, the company offers travellers and city dwellers access
to over 130,000 homes around the world. OYO today operates in over
800 cities in 80 countries.
• OYO is currently one of the tourism industry's fastest-growing
companies. It is the world's sixth-largest chain of operated hotels,
homes, managed living, and workspaces
  The Leisure Group is one of the largest players in the European
market in vacation rentals management, having built deep data-driven
capabilities in revenue management, homeowner engagement, and
History of property management services.

Leisure group  The company has four brands—- Belvilla, DanCenter, Traum-
Ferienwohnungen, and Danland. Belvilla, DanCenter, and Danland
offer more than 30K-fully managed holiday homes across 13 countries
in Europe.
 At the beginning of June 2019, OYO, the fast-growing budget hotel start-
up that’s backed by Airbnb, SoftBank, Grab, and Didi has made an
acquisition to expand its footprint into Europe, specifically around self-
catering home rentals
Axel Springer had a 51 percent share of the company and said it would
be receiving €180 million in the deal, including the repayment of a
OYO Acquires shareholder loan of around €60 million, and a spokesperson for OYO
Leisure Group confirmed that the full price was €369.5 million
After the acquisition Leisure Group announced its rebranding to OYO
Vacation Homes. The OYO Vacation Homes brand will be used for
corporate and employer branding purposes.
 Weakness
Strengths
A strategy of co-branding
Standardization
Ever-growing network Poor service quality
Spirit of Innovation Tight margins
Subsidizing Hotel Stays
Young and highly spirited leader
SWOT OF SWOT OF
OYO Opportunities OYO Threats
Growing demand for budget hotels. Competition
Focus on budget accommodation Growing concerns about safety
Surge in the number of business travellers
 Strengths Weakness
Leading Vacation Rental Company
Core competency Not owning any of the real estate listings .
Experienced professionals and skilled labour Business model can be copied.
Expanded presence across Europe
SWOT OF Threats
Opportunities Leisure Group
Diversifying into other markets Many competitors
Government regulations may turn out to be
extremely problematic
MODE OF Why to enter in Europe?
ENTRY  Multi-billion Euro Opportunity
FDI with  Demand for vacation homes
Strategic  Unique position
Alliance
(Acquisition) Why use the Acquisition strategy?
 Localization
 Special skill set
 Why to acquire the Leisure group?
MODE OF  Same approach
ENTRY  Skill set
FDI with  Size and Scale of company

Strategic
Alliance OYO’s Strategy Behind This Acquisition
(Acquisition)  Massive opportunity
 Management
 Mindset
 Strengths Weakness
Data-driven
Workforce Cases
3rd largest brand Sold out
Change of game O.Y.O

Opportunities
SWOT OF OYO Threats
Vacation Homes
Rentals market Competition
Revenue Safety
 1.New possibilities provided by the European market
2. OYO has obtained easier access to skilled labour force
3. Diversification of portfolio
Pros of the 4. Low operating cost

Alliance 5. Fastest mode of entry into an international business on a large scale

6. Market power(synergy)
7. Increased strength
 1. Brand not known to the people in Europe
Cons of the 2. Culture and values clash
Alliance
  The global vacation rental market size was valued at USD 87.09 billion
in 2019 with the market’s growth rate of 6.9%
 The travel industry is one of the major sectors that’s been hit
extremely hard by the COVID-19 pandemic
 Scenario in Europe, in Scandinavian (Denmark, Norway, and Sweden)
 Scope of vacation homes is more as people may prefer isolation
 Recently they have revamped the consumer website “Belvilla” with
Current the complete update of UI/UX, intelligent search experience and they
have witnessed positive results
scenario  Hospitality giant OYO has acquired Germany-based TUI’s vacation
homes tour operator business for an undisclosed amount in a bid to
increase its presence in the European market.
  The global vacation rental market size is expected to expand at a
compound annual growth rate (CAGR) of 3.4% from 2020 to 2027
 A massive opportunity
 The market for vacation rentals is expanding fast — and with the rise of
IoT across the world, more and more people are turning to innovative
options .
Future  Technology will been the root of the growth in the vacation rental
market.
Scenario  Now, OYO is planning to join several US Companies in a bid to grow its
Vacation home rental business in the US.
 In India, China, Indonesia, and Malaysia, OYO plans to build its
portfolio of vacation homes in Europe and the UK over the next 12
months.
 In the wake of COVID-19, people seem to feel an even greater need for a
vacation despite travel restrictions
THANK YOU