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Indian budget hotel network OYO invests US$20m for Malaysia expansion plan

OYO Hotels, an Indian hospitality service and budget hotel network, plans to expand further into Malaysia and has committed an initial capital of US$20 million for the expansion.

The company plans to grow its Malaysian team from 50 employees to 500 over the next 12 months, with the leadership and employees comprising local Malaysians. Abhinav Sinha, chief operating officer, OYO Hotels told A+M that it also plans to create more than 5,000 new jobs in Malaysia over the next few years, and achieve “twenty-fold increase” by onboarding 1,000 hotels over the next 12 months. OYO Hotels is looking to expand into Sarawak, adding on to the list of 50 hotels it has across major cities in Malaysia, including Kuala Lumpur, Penang, Langkawi, Johor and Melaka.

Sinha said that Malaysia was chosen as the “first port-of-call” in Southeast Asia given its attractive characteristics such as higher-than-average mobile penetration and a large internet population. Also, budget hotels’ market share of the hospitality sector in Malaysia is growing rapidly, worth US$2 to US$3 billion as of last year. Malaysians are also open to technological advancement and are always looking for convenient ways to get things done, he added.

Sinha described the company’s online and offline marketing strategy in Malaysia to be “highly localised and comprehensive”, building brand awareness on social media platforms such as Facebook, Instagram and Twitter, and acquiring customers through Google and YouTube. It also invests in brand partnerships, with its most recent partnership being with Grab for its loyalty programme GrabRewards. It is also working with GO Communications in Malaysia.

 

According to Sinha, OYO Hotels differentiates itself from competitors by taking ownership of the end-to-end customer experience, right from the search and booking process to in-room amenities, service-delivery and check-out. “We map the customer journey to the smallest detail and providing moments of delight at each step,” he added.

It also partners with small, unbranded hotels on an exclusive inventory basis in a tech-based franchise set up. It then revamps and transforms the rooms into living spaces, enables the small hotels with proprietary technology and sells rooms through its own online and offline channels. Over 90% of the traffic originates from its consumer app, website and other sales channels, including partnerships with Booking.com.

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