After pivot, Oyo makes comeback on OTAs platforms MMT and Goibibo

After more than two years of delisting OYO’s portfolio of hotels from its their website, MakeMyTrip and Goibibo have now allowed the SoftBank-backed franchise model firm to be available on the OTA platforms.

The partnership will allow customers to select from a range of options - from the economy and mid-market hotels, next-door hotels to fully-managed homes across 230 cities in India, Nepal, and Malaysia, and covers over 70,000 rooms.

In October 2015, online travel providers including MakeMyTrip, Goibibo, and Yatra jointly blocked OYO and Zo Rooms from listing its hotels on their platforms. MakeMyTrip’s move to re-list OYO comes almost 6 months after Yatra also showing OYO’s hotel inventory on its platform.

Initially, for OYO and Zo OTAs were major channels for the lead generation, however, the contribution from them fell down substantially (about 10-15 per cent). At the time of delistings, Oyo stated that it has received strong growth in customers booking through channels including mobile app and website.

On the other side, OTA players have said that they can't afford to help their rival companies indirectly to their own website.

Why MakeMyTrip and GoIbibo bring Oyo again

Seeing the recent trends, the budget accommodation space in India appears to be growing fast with players like OYO, Treebo Hotels and FabHotels occupying most of the market share in the segment.

Recently, Mohit Kabra, chief financial officer, MakeMyTrip said that the NASDAQ-listed company may revisit its position on OYO, as it is shifting increasingly to the hospitality side. Therefore, they do not seem to be a direct competitor anymore, but can be seen as a source of supply.

In December last year, the OYO stepped into the pure-play franchise business, which allows hotel partners to become Oyo branded hotel.

After raising staggering $250 million funds from SoftBank including $10 million from China Lodging in September 2017. Meanwhile, the Gurugram-based company managed to bring down its losses by 27 per cent to Rs 363.7 crore in 2016-17 as compared to a previous financial year.

Additionally, the company revenue witnessed 700% jump, which was largely driven by over 2X growth in room nights and significant improvement in commissions.

On the other hand, MakeMyTrip had managed to double its revenue but posted a loss in the third quarter of the financial year 2017-18.

The partnership may fructify for both as OYO Rooms is currently in legal battle with Zo Rooms, while MakeMyTrip merger with Goibibo has not been delivered the desired result.

The development was reported by ET.