On the other hand, we continue to remain sharply focussed on the larger demographic of budget travellers.
The second thing that Ginger did, as did others like IBIS, was what they called “No khaana (food)”—they said breakfast will only be at the lobby. For that, too, you will have to pay more. They also squeezed the size of the room. I felt that both of these practices were customer-unfriendly.
I have tried as much as possible, in the majority of our hotels, to promote our hotel owners to continue sending ghar-ka-type khaana (home-style food) to the room. This is one big reason a lot of our customers choose to stick with us.
How much of your business is from repeat customers?
I think corporate is very critical. Basically, corporate for us is two parts—one is corporate employees who use an app and book with us. The second is corporate employees who use the OYO Wizard programme. OYO in India has partnered over 5,000 corporations, including many small and medium businesses. Pre-Covid, we got 20% of our revenue from this stream, what we call MM or micro-market business.
Regarding our overall national business, 70-75% of our revenue comes from repeat customers. And around 15-17% revenue comes from what we call organic customers. Organic is very simple—people who don’t need advertisements to come stay with us. People will just go to the OYO App, search for a hotel and come; Or if there is a corporate, where there were three employees who used to come and then a fourth employee started coming. So wherever you did not have an incremental expenditure marginal cost to bring the customer.
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And this is India only, let me clarify. OYO India would have roughly 90% revenue for which you did not spend marketing dollars. But relatively, Southeast Asia will follow where we see this in the range of 55 to 60%. Our OYO Vacation homes business in Europe will follow, which will be roughly 50%. And then everything else.
Q. Normally, one would think that repeat customers making up the bulk of revenue isn’t necessarily good as that means you’re not bringing in more people into the top of the funnel. How would you reconcile that, especially since your revenues have gone up 4X from 2018 to 2019, but 90% of the same people coming in?
How does that work?
Yeah, I think, first off, the 4X jump is significantly driven by some of the global expansion. But that said, you’re right. A large part of revenue growth is still being driven by the same customers.
I have always believed that in India, if you build a business designed on the back of marketing dollars, it’s very hard to make money because how many marketing channels do you have overall? You have Google, Facebook, and then television. I can’t afford television, and Google and Facebook will squeeze out every dollar I make because there is MakeMyTrip, Expedia, and the big guys who are bidding on those.