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Online hotel aggregators are standardising the budget hotel experience, and for cheap. Will they succeed?


If there is one concept that Indians readily buy, it is the ‘value for money’ concept. And while by this standard, budget hotels in India should have really taken off, most of them continue to languish thanks to dismal occupancy rates. According to industry estimates, there are over 1 million rooms in the budget hotels category across the country that struggle to find occupants. Customers looking for accommodation are willing to fork out a little more and stay at larger hotel chains because budget hotels are not unified by any standard norms, rules or service guarantee. While online travel agencies such as MakeMyTrip and Yatra put a bunch of these hotels online for bookings, the issue of standardisation, service and quality of rooms still remained.

Tarun Davda, MD, Matrix Partners IndiaIn order to solve the problem of standardisation, online hotel aggregators such as OYO Rooms, ZO Rooms, Stayzilla, ZipRooms, Vista Rooms, FabHotels and Wudstay have mushroomed over the past few years. “Before OYO entered this space, there were no minimum standards set for hotel accommodations. Since day one, we have strived to solve problems of not only accessibility and availability, but also standardisation, all with the help of technology,” says Ritesh Agarwal, founder, OYO rooms. OYO has a presence in 140 cities, with its 4,000 hotels partners offering over 40,000 rooms. How does it work? According to OYO, it takes about 48-72 hours to make a room match its standards and about Rs.10,000-Rs.12,000 to rebrand it. It has collaborated with hotels and vendors to standardise rooms across properties by offering a uniform set of features such as Wi-Fi, breakfast, a flat-screen TV, clean linen and branded toiletries. Agarwal says that technology and an ecosystem of vendors will together help standardise the company’s offerings.

Yogendra Vasupal, Founder, Stayzilla


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