According to the report, the two main factors that have helped OYO improve the unit economy as EBITDA turned positive (adjusted) in the first quarter of FY23, the company’s broad improvement in travel trends and corporate restructuring.
While OYO faces stiff competition from traditional hotel companies, short-term vacation rental companies, other online travel agencies (including
Sales show steady momentum across all segments in Q1FY23.
“OYO’s ability to provide customers with access to a wide range of high-quality storefronts at an attractive price, coupled with brand strength and attractive loyalty and referral programs, drive organic and repeat demand for storefront bookings, resulted in a higher gross booking value (GBV ) for the company,” the report quotes.
Gross booking value (GBV) per hotel per month recovered modestly in FY22 and jumped sharply in 1QFY23 from the low in FY21. The report also emphasized that the number and variety of store windows is a measure of the breadth and reach of the platform and is an important value proposition for customers.
Therefore, growing customer base and global store footprint will be critical to the organization. It will also need to maintain a focus on increasing gross booking value (GBV) per window – organically, including from various loyalty programs to drive new customer bookings and drive growth.
The report also referenced OYO’s asset-light, technology-driven business model that has enabled it to scale business globally and give it a competitive advantage in the short-stay space, in addition to accelerating technology/product development and adoption to reduce operating costs. Reduce. costs and repositioning its offer.
OYO’s adjusted gross margin improved from 9.7 percent in FY20 to 33.2 percent in FY21 and 40-41 percent in FY22/1QFY23. In FY22, Adjusted EBITDA losses decreased to Rs 4.7 billion from Rs 17.5 billion losses in FY21, and the company turned profitable on EBITDA (Adjusted) in 1QFY23. In addition, the company’s Contribution earnings improved from 5.1 percent in FY20 to 22-23 percent in FY22 and 1QFY23.
OYO personnel costs decreased 63 percent year-over-year in FY21 (growth 7 percent year-over-year in FY22), thanks to employee rationalization, centralization of key functions in strategy, better revenue management, relocation of company support teams from country level to regional level, rationalization of non-core activities and increased automation led to operational efficiencies.
However, the report also pointed out that OYO is currently targeting India, Indonesia, Malaysia and
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