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Swot Analysis For Hotel Industry

941 Words4 Pages

Hotels/Hospitality Indian Budget Hotel Segment

We are focusing on the Budget hotel segment in the Hospitality industry which have been tapped by a lot of start-ups in the recent past.
Focusing on the budget segment of the Hotel Industry, as per the middle class family and junior level corporate traveler, the average ticket size for one night booking was Rs.1000-1500 and there were not many hotels offering the rooms at such low prices and at a decent quality and it is there where Oyo Rooms found a business opportunity in 2012 by Ritesh Agarwal. Starting at Rs. 999 + taxes all amenities are available now across all leading cities in India, Malaysia and Nepal.
The information is based on data received …show more content…

Bargaining power of Buyers (customers) : High degree of bargaining power of buyers. There are players in this market like go Ibibo and Make my trip who offer attractive discounts to bring in customers which act as a threat to Oyo Rooms. So if Oyo does not offer rooms at competitive prices with quality service, good ground support and attractive discounts matching up to or better than their competitors, the customers may switch to other service providers at any point in time. The customers today have a lot of options to choose from.

3. Bargaining power of Suppliers: Low degree of bargaining power of suppliers.
OYO rooms take care of complete hotel operations where owner doesn’t have to think of the day to day operational issues/Occupancy issues and other OTA’s(other market channels) inventory issues. They are getting sufficient money with brand integration with OYO every month which they were not able to generate earlier. Currently in the market there is not a single competitor who takes up the complete property and runs the operations under their brand.
So in this case there is a huge positive response in favour of OYO from the suppliers and they are readily partnering with OYO for their …show more content…

Threat of substitute products: Low degree of threat.
The value addition that OYO has done in this segment is that they have a strong 24 * 7 ground presence in the form of their agents which no other competitor has here. In Indian market customers still believe in a personal support based system and therefore this unique feature of OYO Rooms is attracting a customer base.
Threat of substitute is also low because Oyo is working on very low profit margins, to now enter the market a new entrant has to work on negligible margins and this will not be a profitable prospect.
5. Competitive Rivalry: High degree of competitive

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