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Oyo Hotels' Kasra Moshkani discusses:
India-based hotel company Oyo Hotels in September promoted Kasra Moshkani to country head of the United States. Prior to joining Oyo in 2019 as region head for its Eastern U.S. division, he was the South and Southeast regional general manager for Uber. Moshkani in October spoke with BTN lodging editor Donna M. Airoldi about his goals for growing the Oyo brand in the U.S. following a corporate restructuring and amid the coronavirus pandemic. The interview has been edited for length and clarity.
BTN: Oyo launched its U.S. operations in mid-2019, yet it started 2020 with layoffs and a global restructuring, even before the coronavirus pandemic began. What was the impetus for adding a U.S. head?
Kasra Moshkani: The pandemic certainly had an impact on the industry, on our asset partners and our U.S. business as well. We certainly had to make some changes. The key impetus behind [my new position] is that while the last year and a half or so has been about setting roots and growing in the U.S., and the last few months have been challenging for the industry, we actually feel pretty good about where we are from a business point of view. The business has reached a size and stability that it made sense to have a dedicated leader for the U.S. And I'm excited to step into that role. We are making this investment in dedicated leadership, and we will continue to make investments in the U.S. business; it will be a key geography for us in the global portfolio.
BTN: Oyo CEO Ritesh Agarwal in February told BTN that the U.S. was the fastest-growing division of the company. But then Covid hit. Where does it fit now in the portfolio?
Moshkani: The U.S. in last few months has been one of the most resilient regions for us. Part of the reason is that the recovery from an economy perspective in the U.S. has been pretty strong. That hasn't consistently been the case across the world. While we have had some shutdowns at the state and local level, there's been a strong push to really open up the economy and get back to more normalized travel while taking steps related to hygiene and cleanliness. But I would say from a resilience-of-business perspective, the U.S. has been a standout.
BTN: The company currently has a footprint of more than 300 hotels and nearly 20,000 rooms across 37 states. You added about 8,000 rooms in the U.S. since January. How were you able to grow during this time?
Moshkani: [That growth] is something we are very proud of, especially in the context of the greater challenges in the industry. Part of what we are seeing is that for a lot of hotels that previously operated independently, their current environment is tough. A lot of business they counted on has disappeared. A lot of the preferences of their customers have changed in terms of prioritization of cleanliness and hygiene. Their ability to retain their staff in tight financial situations has been sort of stretching them, and what we've seen is an uptick in the number of independent hotel operators who see the value and really want to have a partner in running their business.
BTN: Over the summer, Oyo let go of about 90 percent of its remaining U.S. staff. What is the current outlook for your U.S. workforce?
Moshkani: We still have a few hundred people who are working on our U.S. business. It is a leaner team than we had previously due to the industry-wide impacts. But we are making investments in the business. As the industry and the economy continue to recover, as our business continues to recover, I do anticipate that hiring will commence at that point. It is dependent on what happens with the economy as well, but I think we are getting closer to that point.
The U.S. in last few months has been one of the most resilient regions for us. Part of the reason is that the recovery from an economy perspective in the U.S. has been pretty strong. That hasn't consistently been the case across the world."
BTN: What has Oyo learned about operating in the U.S. since its launch, and how has your strategy changed?
Moshkani: We had established ourselves in a lot of other countries, and we had technologies, learnings and capabilities we brought to our asset partners in the U.S., and that gave us the ability to scale relatively quickly. The goal here is that we are building for the long term, and we will do that with sustainable growth. Obviously, we're a company that is relatively young, and we have huge aspirations for growth and servicing partners and serving guests. Those aspirations are as big today as they have ever been. The thing we've learned is that we definitely want to do that sustainably. We want to be very thoughtful about how we approach the market.
BTN: What are your overall plans, goals and key opportunities in your new role?
Moshkani: One of them is continuing to grow, and that is going to take time. We are proud of the progress we have made to get to 300 hotel partners to date, and our hope is that we'll continue to grow. We Initially launched in the South and Southeast, so that is certainly where we have the strongest foothold. But since then, we also expanded into the Northeast, the Midwest and the West regions. It's exciting, the traction that we've gotten from a hotel-owner partnership perspective. Part of how we're also [growing] is in launching new brands. One example is our higher-end [Oyo] Townhouse, which is still in sort of that budget-midrange segment, but it offers a bit of an elevated experience from an amenities point of view for guests. We also are rolling out a new brand called Capital O. It's sort of an intermediate between Oyo Hotels and Oyo Townhouse.
BTN: What strategies that you developed in India and other parts of the world are you bringing to the U.S.?
Moshkani: Oyo is a technology-driven company. An example is we've invested in a [property management system], or an operating system, that we make available to every hotel partner that is part of the network. It has been honed over the years, and we were able to deploy that fairly quickly in the U.S. Another is our consumer app. [Millions] use [it] to book their experience, and they come back and do that over and over. It is both the technology that we have been able to leverage very quickly in the U.S. and also that dedicated base of guests who rely on Oyo wherever it is they are traveling around the world. I'd [also] highlight [three] other things. One is general capability building that we've built and honed in other countries. For example, around pricing and pricing technology, we have a team of data scientists and machine-learning scientists who have studied all of the data that we've captured around hotels globally. We've been able to leverage those learnings for our asset partners. Another example is we work very closely with our hotel partners on distribution. How are we helping and enabling our asset partners to really showcase their properties? The third is that while today we are a very large company and operating globally, we continue to be entrepreneurial. When we enter a new country and even enter new cities, we are not taking a blueprint and forcing it to fit. We are getting to know the owners, getting to know the local city and the local neighborhoods. We are adapting how we are working with partners. We listen to feedback. So far, it's been helpful in the United States.
BTN: What about opportunities for capturing more corporate travel? Agarwal in February said it accounted for about 20 percent of your business. What is it today?
Moshkani: Obviously the last few months the entire industry in travel has been disrupted. We are seeing consumer spending decline. We are seeing the impact on airlines. Work from home and remote work is an interesting trend as well, and that impacts business travel. Corporate travel managers have smaller budgets, they generally have to do more with less. But in the context of all that challenge, the Oyo business is relatively well-positioned. [But] one thing we're starting to hear from a majority of corporate customers is that they are ready to travel again. We see that as a good sign, and that is certainly something we hope to partner with those corporations on.
[Also,] from a budget point of view, we are seeing a lot of corporations operate on smaller budgets, yet need to achieve more, which is something that resonates with this segment we operate in, and we hope to be there for those corporations. More specifically, while a lot of the large corporations have been hit, the active corporate travel segment is keeping the economy moving, [such as] construction, heath care workers, emergency services, trucking, manufacturing. We are seeing this travel picking up, and we've been well-positioned to partner with those demographics to provide them a place to stay. … Disaster recovery and infrastructure building—related to that, we are seeing a bit of an uptick in extended stay, which is helpful to balance the short stays that our hotel partners often see.
Finally, the Sanitized Stay program is something we are proud of. We partnered closely with our hotel partners to understand their point of view—"What are you hearing from your guests? What are the ways we can best serve them from a hygiene and cleanliness perspective?" Then really rolling out a program that we know is going to work for the hotel partners. And at the same time, it will give both corporate and noncorporate travelers that peace of mind.
BTN: The company shared that September U.S. revenue per available room had reached about 92 percent of pre-Covid levels. To what do you attribute this turnaround?
Moshkani: One is the segment we operate in. Again, [we're] catering to that budget and economy segment in a world where we know a lot of people are spending less, the economic climate is tougher, and therefore see people sort of trading down from higher-end segments. We're also seeing a lot of essential travel continue. The other piece is really the capabilities we deploy, [like the] pricing strategy. Through that, we are able to offer a strong capability of revenue management for hotel partners. And then the third piece is how we can run distribution. We work very closely with our partners on maximizing their reach via online channels and offline channels. With regard to the [online travel agencies], launching things like the Sanitized Stay program, making sure from a conversion perspective, as many of our hotels are on page one of that search page as possible. From an offline perspective, really understanding the local nuance, so when a hurricane rolls in or there is some sort of very local need, that we are deploying our team, again, in an entrepreneurial way and working hand-in-hand with our partners to capture that demand. It's a combination of those three things.
While a lot of the large corporations have been hit, the active corporate travel segment is keeping the economy moving, [such as] construction, heath care workers, emergency services, trucking, manufacturing. We are seeing this travel picking up."
BTN: You noted some people were "trading down" in hotel segments. With your corporate enterprise business, are you seeing a new type of customer?
Moshkani: We are. I think it goes back to, if you look at the impact that the economy and Covid has had on corporations, a lot of corporate travel teams [and budgets] have been reduced. That's been an exciting trend in that we can partner with those managers in a way that wasn't as clear previously. Where budgets are leaner, the amount of support provided to their teams can go just a little bit further with us in the budget and economy space. We are seeing a little bit of shift there in terms of who we are able to serve given those dynamics.
BTN: In February, your CEO said you had an eight-member sales team dedicated to corporate sales. Is that still the case?
Moshkani: For the corporate market we certainly have a robust team. I'll have to get back on the exact number on that team. But it does continue to be an area we emphasize for a couple reasons. One is that many of [our] hotel partners don't necessarily have the capability to have that team on their own. So that is a significant value-add we can bring to our partners where we can immediately open up that distribution channel of corporate guests. The other is that we have seen great adoption from the corporates on that side. It goes back to a lot of the trends I mentioned previously where from the perspective of the last few months, it has been a robust channel for us.
BTN: How do you reach out to travel managers? Is it from travelers telling them, or do they see their travelers staying at Oyo properties, or are you reaching out directly?
Moshkani: It's a mix of all three. Our corporate sales team comes from a background of having done this in the industry for a long time. They may have corporate traveler relations, direct corporate relations, so they are bringing all that with them. That is an important part of what we offer to the hotel partners, that capability. We are reaching out via intermediaries; we are reaching out directly. It's really about marrying two things, one where our existing team has relationships, two, getting referrals from existing clients or word of mouth, and then to the extent there are intermediaries we certainly have relationships there as well that we try to leverage.
BTN: What other trends are you seeing for the U.S. market?
Moshkani: That drive-market customer is something we are seeing both on the business and the leisure side. And that may be the case until there is a vaccine available or other measures that give people peace of mind. More broadly, as I step into this role, I'm optimistic for the future of our U.S. business. Recovery has been strong, driven by the economy, driven by the role that we play in it, and some of the steps we've taken to deliver value to both guests and to our hotel partners. We will continue to adapt and grow while recognizing it’s a hyperlocal business. But wherever our guests are at the end of the day, we want to be there to deliver that reliable and consistent and value-driven experience for them.
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