This winter holiday, more and more Indian travellers seem to be chasing cheap chills.
Hotel chain and room aggregator OYO has seen a 104% rise from the last season in bookings for hotels in cold destinations, like hill stations Mussoorie and Shimla. Reservations in warm destinations—Goa, Puducherry—are up 66%, according to data provided by OYO.
The period studied was Dec. 25 through Jan. 06 of 2017-18 as well as 2018-19.
OYO’s data on travel patterns “broadly represents the Indian market in general,” Yugal Joshi, vice-president of Texas-based consulting and research firm Everest Group, told Quartz. “People are travelling more, they’re spending more on travel, which is a reflection of our growing economy in general.”
Social media may have played a role in the travel boom, Joshi said. “People see their friends going somewhere, so they want to go there. They get influenced by the pictures people have posted.”
OYO also noted that it had seen a large increase in solo tourism, claiming there was a 133% increase in bookings from solo travellers visiting cold destinations compared to last year. “I think it’s a reflection of a new India, that people are travelling alone as well,” Joshi said. Previously, he said, travel in India had mostly been dominated by families and couples. But now, “going alone isn’t a big deal anymore.”
The hotel-room aggregator’s growth over the past year itself has been staggering in the meantime.
This September, it raised a fresh $1 billion in funding at a $5 billion valuation in a round led by existing investors Softbank, Vision Fund, Sequoia Capital, and Lightspeed Venture Partners. The company is also expanding well beyond India into Malaysia, Nepal, the UK, and even the challenging market of China.
But it remains to be seen if OYO’s growth is sustainable.
“Traditional hospitality groups like Mariott and Taj are now getting extremely aggressive in terms of partnerships, pricing, and offers. So OYO is now treading into a bit of traditional territory of hotels—which is not clearly their expertise,” said Sanchit Vir Gogia, the founder and CEO of Greyhound Research.
“So they’re burning a lot of money and time. That’s not going to be a problem today, but that’s clearly going to be a problem a few quarters down the line, because they will be impacted by (the) increase in operational spend,” Gogia said.
In the long run, he added, “Their success may be highly questionable.”