Connected & Ready

Be our guest: how tech helps small hotels act big, with Gautam Swaroop

Episode Summary

Few industries were affected by COVID-19 as much as travel and hospitality. Now the industry has prioritized incorporating technology solutions to streamline operations and improve the guest experience. In this episode of Connected & Ready, host Gemma Milne talks with Gautam Swaroop, CEO of OYO International. They discuss how COVID-19 has transformed their industry, changes in customer behaviors and preferences, and new technology possibilities for hotel property owners to help them improve the customer experience. Dynamics 365 is helping businesses of all sizes unify their data and create a digital-first culture. With next generation ERP and CRM business applications, employees at every level can reason over data, predict trends, and make proactive, more-informed decisions. Request a live demo of Dynamics 365 today: https://aka.ms/AA8vns5 Thank you for listening to Connected & Ready! Do you have ideas of how we can improve the show? Want to recommend a guest for us to interview? We value your partnership and participation. Please drop us a note at connectedandready@microsoft.com. We would love to hear from you.

Episode Notes

Gemma Milne talks with Gautam Swaroop, CEO of OYO International, about the impact of COVID-19 on the travel and hospitality industries, the role of technology in helping property owners respond to changes in what customers want and expect from a hotel, and new opportunities arising from innovations such as smart technology and automation.

Topics of discussion

 

About Gautam Swaroop:

Gautam Swaroop is the Chief Executive Officer of OYO International at OYO Hotels & Homes where he oversees international operations across the United States, China, and the EU. Gautam has been with OYO since May 2020. Before joining OYO International, he worked for Dr. Reddy's Laboratories, an Indian pharmaceutical company, where he led the company's business development and strategic planning in Australia and China. Prior to joining Dr. Reddy’s, Gautam had more than 10 years of experience working as Associate Principal at McKinsey & Co.

Learn more:

https://www.oyorooms.com/us/

 

Sponsor link

Dynamics 365 delivers next generation ERP and CRM business applications, helping employees at every level reason over data, predict trends, and make proactive, more-informed decisions. Request a live demo of Dynamics 365 today:

https://aka.ms/AA8vns5

 

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Episode Transcription

Gemma [00:00:05] Hello and welcome. You're listening to Connected and Ready an ongoing conversation about innovation, resilience, and our capacity to succeed. Brought to you by Microsoft. I'm Gemma Milne. I'm a technology journalist and author, and I'm going to be exploring trends around how companies are adapting to a disrupted world and preparing for tomorrow. We're going to speak to the innovators who are bringing products, operations, and people together in new ways. In today's episode, chatting with Gautam Swaroop, CEO of OYO International, to talk all about the impact COVID-19 has had on the travel and hospitality industry with the change in customer behavior and preferences, we learn more about how OYO is leveraging technology to redefine the travel and hospitality experience, we discuss the future of hospitality, and we hear all about how applied technologies benefit smaller hotels and properties. Gautam, thank you so much for coming and joining us on the show. Let's start with some introductions. Tell us a little bit about your role and your journey at OYO.

Gautam [00:01:05] Thank you for inviting me, Gemma. Glad to be here. I joined OYO about two years back. I joined as CEO for our China business, and in January this year, my role was expanded to one of the three business units that we have, which is OYO International. OYO International covers our hotel businesses in US, UK, Spain, Brazil, Mexico, Philippines, Thailand, and China. Before OYO, I led the entry of one of the pharmaceutical generic companies into 25 markets across the world. So many of these markets I have been engaged with for the last 10 years with the pharma company and before that for 10 years I used to be a consultant at McKinsey. 

Gemma [00:01:50] Amazing. We're really happy to have you here to talk. So let's hear a little bit more about OYO. Obviously, the company traditionally serves customers in travel and hospitality, so we'd love to hear a little bit about that, but also what's shifted over the past two years considering the worldwide impact of COVID and of course, all the travel restrictions. 

Gautam [00:02:10] So the way I see OYO, OYO is a technology company that is trying to bring three things together. It is trying to bring a hotel experience of the physical state. It is trying to bring a booking experience that you would get from an online travel agent. And it is trying to bring a Shopify-like revenue enhancement tools to a patron. So we are trying to combine these three things and which I believe is unique versus anybody else in the industry. We want to celebrate the uniqueness of each hotel, ensure that that is brought to a customer through transparency, versus trying to force every hotel to follow exactly a standard and start looking similarly. So for a lot of owners who run these very small hotels we wanted to ensure we enable them via technology so that they can participate in the era of technology-based development that is happening and help them improve their income and get them more time at their hands. Now, the pandemic seems to be more impacting the hospitality industry compared to some of the other industries. But what we did as a leadership is we really doubled down and increased our focus on our customers and on our patrons, which is our asset owners. And it's very interesting, you know, that the needs of a lot of our customers and patrons changed in this time. And we also had to react because a number of our algorithms were built for the pre-pandemic world. So a lot change in our customers and their needs were. So for example, what came out was a need of for flexibility came out as really people were never sure what would happen to their travel. So we were one of the first people to introduce fully refundable fares for things which a few months out, fully recognizing that the customers may have to change their plans. And we really had to work on our refund turnaround around times to build that trust in the customer. Then was the change of preferred destinations for travel. So travel used to be something which you did either for office work or you did during holidays for a week or two weeks, and those were the kind of travels. But what we saw was people were a lot more comfortable going to drivable destinations rather than flyable destinations. So certainly the top locations for the travel changed. Third, we saw that there was a need for different type of content. So from the earlier era where they would look for a jacuzzi or a pool, you know, now they were looking for whether the staff is vaccinated, whether you sanitize the rooms, what are your SOBs, you know, so we had to modify our content to ensure that our guests were able to get what they were looking for. So we have modified our systems, our ability to react, and our products such that we can launch a new tag on a property very quickly. So this was on the customers side on the patrons side, I think at the core it was very simple, which was, you know, can you help me increase my revenue or profit? And can you give me more time back? So everyone understood that travel is really down, and it's not going to be back to the level pre-pandemic levels very soon. But what they wanted to always know is, are they getting a disproportionate share of the travel which was coming back? Right? And with the initiatives that could be launched on the consumer side – the kind I was explaining. In the US, a typical OYO patron compared to his competition set had a recovery of 30 percentage points or better throughout the pandemic, you know, so therefore we had to keep them updated on their SDR index, which is the industry report with their competition set, to ensure that they feel the comfort that they are actually doing better and they want to know what they can do to do better. Number two is they actually wanted us to become far more conservative in our decision making. So pre-pandemic, you know, OYO had developed algorithms. Like I said and we did the pricing, we did the inventory management, we did the room naming, you know, whether it's a double room, king room, this, that, ocean facing. Now they basically wanted much more say because they said, look, we understand what's happening nearby much better than you do, and therefore give a lot of power to us and allow us to give you a lot more input into how this property should be managed. And we modified our systems to cater to that need. Third, they basically said they need support in reducing their operating cost So, for example, we introduced automated checkout functions for the customer. So the guess, instead of coming to the front desk or calling the hotel, were being catered to through the automated chat bots or to the chat executives that we had. A lot of our patrons are wanting to acquire properties, so we actually have our own backend algorithms. We have a 72 point system which tells us how much a property has a potential to increase its revenue. So we are actually now providing them that service that we provided health scorecard on a potential opportunity that they might be going after. So. So the pandemic has actually forced us to understand how the consumer and patron behavior changes and then pivot our business services such that we can cater to those needs. We are very happy with actually many of the patrons that I speak to in the US or in UK that tell me that the revenues they have in 2021 are actually better than 2019. So which is a very good thing to hear from them, and they have brought more properties onto the platform with us. 

Gemma [00:08:11] So we spoke a little bit about how to kind of optimize the experience and the insight that you're able to gather in terms of what customers are experiencing, or what patrons are doing in terms of being able to get more bookings and so on and so forth that obviously you're using a lot of different algorithms to do this. Was it a case of, you know, adjusting the algorithms to adapt to different travel behaviors in order to be able to get that insight? I mean, what was that process look like?

Gautam [00:08:38] Yeah, so the algorithms had to be adjusted a bit. So, for example, there was a search algorithm. The search algorithm originally showed the typical cities that you traveled and those hotels showed up first. It had to be modified to show hotels that were in nearby cities. The hero images of the hotels, which were being shown, they had to have different content and had to have different tags that basically showed up with the hotel. In terms of the reviews that were shown, they went from the comfort and the fun areas to, you know, how the hotel was doing on the sanitization and the protocols. You know so this was a search [unintelligible]. On the pricing side, the pricing became a lot more inflexible. So earlier, our pricing goals used to be a lot more steep, where it's small price decreases the goals used to go up. But we realized that the travel is not happening that much. So what led to conversion was not just the price, but, you know, other factors that we had to bring in. In terms of the promotions that we applied on the hotels. What we understood is now people, you know, even on OYO network, they preferred to go on a hotel that they have stayed in earlier. So therefore, you know, we had to modify that. So the algorithms had to be modified for both pricing as well as searches and the content that got showed up for the guests who came to the site. 

Gemma [00:10:10] There's lots in here, Gautam. But I think kind of bringing it all together seems to be a source of a level of knowledge or insight or seeing the unseen that clearly OYO focuses on. And I would assume a lot of that has to do with data and the technology solutions that you employ to not only allow you to adapt your systems and adapt what you do, but to get that understanding in the first place to give you insight into what sort of adaptability you should take on. I wonder if you could tell us a little bit about what kind of technologies and solutions OYO employees and applies to challenges like, for instance, quantifying the impact of the pandemic and changing systems and allowing yourself to understand exactly what customers and patrons are looking for .

Gautam [00:10:56] Look on, in terms of technology. We have few groups of technology that we need to look at. One of the most common is around the pricing algorithms and pricing infrastructure that we have. We're trying to use this data and artificial intelligence and machine learning to actually now pay back a lot of insights that we would have had back to the patrons. And give the control to them, whether they feel this is the right decision or not. So through this AI, we are able to say at 6:00, should you put your rooms on flash sale or should you not? Should you charge very differently for a particular type of room on a particular type of date or you should not? So a lot of the pricing was one. Number two was around this data and intelligence, artificial intelligence, giving recommendations to the owners on how to improve their revenue in the short term and in the long term. So we are trying to bring down a lot of our costs down by automating the decision making. We analyze that. You know, we had a lot of layers of people who were taking decisions that the patron was requesting and 99.6 percent of the times we were approving the decision. So we brought those algorithms along with the chat bots for both consumers and patrons to make those decisions. As we go forward, the only steps we have taken on with Microsoft on IoT and smart rooms. Similarly, we are taking some early steps on voice related search.

Gemma [00:12:30] Thinking about scaling up all of this really interesting work that you're talking about  to really enhance both the experience of the customers, but also of the patrons you mentioned, for instance, using chat bots or automated chat responses and also, you know, using new tags to describe the properties. Has automation been used to, I guess, help scale some of these different kind of services that you've been introducing to help optimize these various different kinds of experiences? 

Gautam [00:13:00] So that's a very good question. Originally, we were limited by the number of people we have in the fleet. We have completely turned on its head and we aspire that any hotel anywhere in the world wants to join us can basically come on the website and within 30 minutes be live across multiple channels and that has required a whole bunch of technology, relative thinking. We have had to figure out how to get the right licenses loaded and checked automatically. We've had to figure out how to get the photographs for the person from another channel that he may be listed or allowing him to upload it and then replicating it across. We've had to connect to multiple online channels through the right APIs, and then do it in a manner that is basically from two weeks comes down to 30 minutes. So that is the first level of scaling. The second level of scaling is how we increase the revenue for the owner. And here we have had to create a lot of work at the backend people used to do. And they had developed the knowledge of how different factors lead to different movement in the ranking. We had to convert it into automation and then allow the patron to actually take these decisions. So a lot of these things, you know, which humans used to do are now being done by algorithms. Third is how the operations get money. So, for example, we used to get, you know, many, many thousands of calls on our call center and we developed a product called Yo! Chat, which has won a lot of awards in India for the best customer friendly innovation. And today, 74 percent of all requests that customers have are actually getting handled by the Yo! Chat chat bot and escalations have gone down. The customer satisfaction has gone up. People are getting 24 by seven service. Same with the tools for our patrons. So our patrons earlier had to go through several layers of approvals if they wanted to block a room because there was repair happening or because the AC was not working. So now we have converted into algorithms where we understand the past history of the patron. And based on that, we are able to bring down the cost of operations for these people. And the most proud thing, which I feel is patron [unintelligible], which is their satisfaction score, is at an all time high. Quarter on quarter, from quarter two 2020, it's improved every quarter in every country. And the reason this is happening is because all these automations that we have brought are actually giving them faster service and they're happy. Still, you know, it's not that we are satisfied we would want to take it even higher. 

Ad [00:15:42] Dynamics 365 is helping businesses of all sizes unify their data and create a digital-first culture. With next generation ERP and CRM business applications, employees at every level can reason over data, predict trends, and make proactive, more-informed decisions. Request a live demo of Dynamics 365 today by following the link in the episode description.

Gemma [00:16:09] You mentioned the smart room concept. Wonder if you could elaborate a little bit on what that is and what it provides for customers. Why it's I guess I would assume you're reacting to what the customers are wanting or telling you that they want. So how does a smart room sort of deliver on these changing expectations? 

Gautam [00:16:26] So this is a project which has just started. So with this recent partnership, I think Microsoft and our teams are collaborating on this. A very early, very simple application is, for example, for OYO vacation homes. There used to be a person who would actually go and deliver the key of the home to the person who had booked the room on the day of the room booking. Now we have created smart locks where you actually get a code and the person can enter the code and the lock up, and then he gets the key. So this is one of the first things which have come to life. But we would want a whole number of things, including things like touchless check ins and checkouts and things like, you know, providing the experience across multiple platforms and the connected experience to the guest, not just on the app but also, you know, across email or various devices to which he's interacting with us. So there are a bunch of those things which we are trying to come and do with the smart homes, including electricity monitoring and those kind of things. But these are works in process and it will take time to work out.

Gemma [00:17:32] Thinking, I guess more broadly than about hospitality technology? And you know, you mentioned that or you and Microsoft are in this multiyear strategic partnership to develop this next gen technology for the hospitality sector. I wonder if you could talk a little bit about what are the goals and what's really behind this idea of next generation hospitality technology. 

Gautam [00:17:54] So we actually, our motto in China, where I met this person, was that “even small hotels can do big business.” And in a way, we are taking this across the world that we want to enable the hospitality industry through technology so that these people who are so hardworking and entrepreneurial can actually create more from the resources they have. And I understand that is Microsoft's mission to help everyone do more from what they have. And at least at OYO in the senior leadership group, we were very impressed with actually how Microsoft has worked with small businesses and, you know, small and medium enterprises and help them create more for themselves. That beginning of thinking at macro level. But the solution really happens at a micro level, and that's true for us also. But you know what, really, the optimization of revenue goal happens at a hotel by hotel level. So for us, these are the things we are looking to do with Microsoft and take it to hundreds of thousands of owners. The reality is this world has probably two 225 million rooms between hotels and homes. And organized sector may have at most 20 percent of that. So there are that many other rooms with hotel owners and homeowners who can benefit from this technology, getting the data and AI and getting the trust and safety for the guests to actually help them improve their situation. 

Gemma [00:19:20] I wonder if you could talk to us a little bit about how you envision the experience of travel evolving from this point. What does it mean to do more with what you have considering what we currently have is still changing and perhaps fragile environment in the hospitality industry. 

Gautam [00:19:30] Yeah, I think running data to understand trends at a very local level and at a very real time level will be extremely important to guide our patrons. Right? So there was a time where patrons were not able to get even, let’s say, 20 percent occupancy and group travel has dropped by more than 95 percent. We actually then created packages where we could get you and your friends or your family a whole hotel dedicated to you, right? And there'll be no one else in the hotel. I think it will be very important and we would be wrong if we say we exactly know how this will play out. But what we need is ability to be agile and really look at these trends and be able to guide our patrons on this. For example, you know, as a hurricane was hitting US in the South Coast, we knew that this could lead to electricity cuts. This could lead to, you know, many of the people who are actually in the area, either needing hotels in nearby cities or even in the same city. That if their locality doesn't have power. They will need, you know, places that could have power and water. So understanding that empowering our patrons with creating the solution for our customers, reaching them in time and matching this on a very local level, but at scale across the world, I think that will be the key. 

Gemma [00:21:04] I want to build a little bit as well on your focus on the perhaps the small and medium sized hotels. You talked about analyzing data, using AI, machine learning, smart room experiences and so on and so forth. These are, you know, really incredible ideas, but a lot of the time, sometimes this technology is seen as something that is kind of only for big chains or those that can afford to invest in innovation and new technologies. I wondered if you could tell us a little bit about how these kinds of technologies or even just the approach as well that you're taking at OYO to technology. How does that empower the small and medium hotels and other partner properties looking forward? 

Gautam [00:21:35] So I think that's where creating this community is extremely important. All right. So we have about 157,000 storefronts across the world that work with us. That translates to maybe more than 100,000 owners who work with us. Now individually, none of these could afford things like this, but the fact that we have power of this community, we could actually invest in those things and then bring these technologies to these people in a very cost effective manner. Machines are being developed, which are quite expensive, but when you actually have a scale which is of that kind and people are willing to partner with you and innovate to bring those costs down. Same way is things around your chat bot. So for us, I think the power is the more patrons we have, the more this community grows. The power of the community and the power of the network would be higher. And any innovation we do can actually be funded and distributed across a lot more people. That enables us to make this possible. 

Gemma [00:22:48] And what about it from a, I guess, a knowledge perspective? I mean, it sounds like OYO does a good job of being able to understand not only the patrons, but also the customers, analyze trends. How much of that knowledge is being shared and how is that being shared, particularly with the smaller properties that perhaps you can't dedicate a person, perhaps to each individual hotel, we might be able to do that with bigger chains, for instance. 

Gautam [00:23:14] So the one basis we want to have with our patrons is the full OYO app where we want every patron to have this app, but through which we want to communicate with them all the data related insights for them. You know, things like how the hot spots are doing, how the occupancies are doing, how the rates of their competition set properties - are they stable or are they suddenly moving up? You know how the cancelation trends are being seen. So these kind of insights we've started giving them, we are creating a product which is generally software as a service where the patron can opt in to a whole host of services, whether it is participating in a boost, whether it can be, you know, photography, whether it is improving the quality of linens, you know, so a lot of those services we have started, but a long way to go. I heard that Microsoft motto is from know-it-all to learn it all, and we would like to adopt it and learn it all and then be able to give it to the patrons and get them to this concerted management from director management and let them have the choice of doing various things. 

Gemma [00:24:27] You mentioned this ambition to have the patrons of all different sizes being able to access tools and data and insights moving forward that you're building on the OYO site. What would that look like is that kind of dashboards for the patrons or, you know, is it sharing reports? How would that look like? 

Gautam [00:24:36] It's a [unintelligible] app, so it's like a personal app you would have. That every patron, I would want that when he wakes up, he should basically look at it and he should look at it and say, How are my properties doing? So if he has five properties at the same place, he should be able to see how they're doing. He should be able to see all the analytics, you know, by the click of a button saying, you know, how is it vacant? How is it day on day? Which type of rooms are going better? Which type of rooms have good occupancy? Then there should be a recommendation engine, which says If you would like your RevPAR, to improve by 20 percent, we recommend you to do A, B, C, D, E. So for us, it will be a full OYO app, which will integrate all our interactions with the owner. And then they should be available on all kinds of mobile, desktops, tablets, and the patrons should be able to set up email reminders and the connected experience across everything. That's what we would want to take.

Gemma [00:25:34] because I'm I want to finish building a little bit on that. You know, looking forward and thinking about what it is that you want to do next. I mean, you've you've already given us a lot of hints to various different projects and ideas that are happening at OYO. But I wonder if you could paint a picture a little bit about what's on the horizon for OYO at least, or what the sort of vision is that OYO has for the future in terms of hospitality powered by technology, where are we headed? 

Gautam [00:25:58] So I think in the future, we want this technology to be available to every patron who wishes. And therefore, we are trying to make a hotel onboarding onto our platform extremely easy. So from the past where we used to be two to three weeks to get a hotel onboarded on the platform, we have launched OYO 360 in India, where a hotel can get onboarded in just 30 minutes and in 30 minutes it could be selling on multiple new platforms. So number one what we want to do is to make it extremely easy for a patron to join and get access to this technology. Today we are operating in a small set of countries, but we would want to take it to many more countries in the world. Number two is we want that any patron who joins the OYO network can have a reasonable confidence that, you know, connecting with this technology will give him the tools, the insights, and recommendations that he can do better business and substantially better business than he was before joining, whether it is true connection to a lot more demand channels, insights around pricing, insights around the promotions that they can run, ability to have loyalty programs, ability to have, you know, much more customized offers to specific people, etc. We want that every user, the actual guest, they have strong trust on the safety and the promise that the OYO hotel provides. So for example, if you see an image of a room and it shows a yellow sofa, when you reach the room it should have a yellow sofa. If it shows that it has a window with sunlight, it should have a window with sunlight. In the longer term, I think smart rooms, connected experiences for our guest such that it becomes a choice for the smart traveler that once you have gone, there is a three click booking. And then, you know, all the tension is gone and you basically focus on what you have to do. So for me, this is the future of hospitality the way we would like to take it for. 

Gemma [00:28:07] Amazing, Gautam. It's been absolutely brilliant to hear not just some of what you're saying, some of the future visions for OYO and for travel more generally, but also to hear how a company has really utilized data, insights, technology to adapt in arguably one of the most challenged sectors over the past two years. It kind of gives us a little hint of what's possible with an open mind and with a kind of a little bit of a digital first focus can really help you achieve. So thank you for sharing all of these great examples with us and your expertise too, and for coming and joining us on the show. 

Gautam [00:28:39] Thank you, Gemma. Thanks so much for inviting me. It was a really good thought for me and thanks for the insightful questions. Pushed me to think about some of these things as well. Thank you. 

Gemma [00:28:52] That's it for this week. Thank you so much for tuning in. You can find out more about Gautam’s work and indeed some of the broader themes we discussed today in the show notes. If you enjoyed the episode, please do take a few moments to rate and review the podcast. It really helps other people discover the show, and don't forget to subscribe. And tune in next time to continue our conversation about innovation, resilience, and our capacity to succeed. 

Ad [00:29:20] Dynamics 365 delivers next generation ERP and CRM business applications, helping employees at every level reason over data, predict trends, and make proactive, more-informed decisions. Request a live demo of Dynamics 365 today by following the link in the episode description.