OYO ROOMS MARKET SIZE:

CLARIFICATION:

1) Only the market size of OYO rooms will be calculated i.e. only their revenue will be estimated. Their profit margin or revenue model will not be discussed.

2) Their business will be only concentrated on 3 types of cities in India: Metro’s, Tourist Destinations and Tier 2 cities .

3) Oyo’s number of rooms will be pegged at around 5000.

BREAKING DOWN THE PROBLEM:

We will need to breakdown the problem in terms of three categories:

1)No of rooms in different cities: For eg Bhubaneshwar will have less no of rooms compared to Mumbai or Bangalore. Similarly Goa will have more number of rooms compared to jaipur.

2)Average Tariff in each cities: I think that we can fix an average tariff of around 2000 in big cities and metros and around 1500 in small cities like jaipur ,Ghaziabad.

3)Occupancy: Average occupancy in case of big cities and tourist destination will be taken as 250 days in a year while in small cities it will be taken as 150 days per year.

SOLVING THE PIECE:

CITY TYPE NO OF ROOMS AVERAGE TARIFF PER ROOM in Rs

OCCUPANY RATE REVENUE GENERATED in Rs

METRO’S 3000 2000 250 DAYS PER YEAR

250*3000*2000

TOURIST DESTINATIONS

1500 2000 250 DAYS PER YEAR

250*2000*1500

TIER 2 CITIES 500 1500 150 DAYS PER YEAR

150*500*1500

CONSOLIDATING:

Average revenue from Metro’s->Rs 150 crore

Average revenue from Tourist Destination’s->Rs75 crore

Average revenue from Tier 2 Cities->11.25 crore

TOTAL MARKET SIZE CONSIDERING 5000 ROOMS SPREAD ACROSS 3 TYPES OF CITIES->Rs 236.25 crore