Online travel bookings space is an extremely competitive one in India. New startups are coming up and threatening businesses of large incumbents. This is especially true in Online hotel booking space.
Over past year of so, tens of online hotel booking startups have got funded, and some 2-3 year old startups are commanding $100 million + valuations.
Here is a proof that large established players are getting threatened by startups – Large Indian OTA’s like MakeMyTrip, Ibibo and Yatra have now decided to block and remove all the hotel listings put up by OYO and Zo Rooms. Clearly, the move has come about because the OTAs feel threatened with their sudden rise.
MakeMyTrip Spokesperson told ET, “MakeMyTrip has temporarily de-listed OYO Rooms from its platform. Zo Rooms is also getting delisted… and will be off from listings by tomorrow (Wednesday)”
GoIbibo on the other hand have launched their own budget accommodation platform, GoStays and may not want competition. They have also confirmed cancellation of listings.
OYO Rooms and Zo Rooms offer branded budget rooms at unbelievably low discounted prices to their customers. Due to this, bookings for other standard hotels are bound to have negative effect. OTAs don’t want that and want to protect their market share as well as margins. Hotel Booking margins are some of the highest for OTAs and they obviously want to protect it.
On the other hand, OYO and Zo Rooms seem to be hardly perturbed by this move.
Kavikrut, Chief Growth Office at OYO rooms said, “Online travel agencies have been a longstanding business channel for us, but in current scenario it contributes to less than 10% of business,”. Paavan Handa, Co-Founder of Zo Rooms expressed similar sentiments. He said, “There will be a small dip in bookings, but our growth from our app and other associations will more than make up for it. This transition is not a shock for us, our growth is mostly driven by our app and website”
Oyo Rooms currently has 30,000 rooms in over 3,000 properties in 135 destinations in India. Zo Rooms has also aggressively expanded in last year to take their tally to 11,000 rooms in 1,000 properties across more than 50 cities and towns in India.
Both OYO Rooms and Zo Rooms have raised large funding rounds, and are set to raise even bigger rounds in coming days.