Kasra Moshkani, Oyo Hotels & Homes’ new head of business in the U.S., believes his company is poised for outsized growth based on its outperformance of competitors and its positioning within the broad marketplace.
REPORT FROM THE U.S.—Oyo Hotels & Homes has been on a roller coaster in the past year, with a meteoric rise to one of the top global brand players followed by internal cuts and restructuring before leading into an industrywide, pandemic-induced downturn. But the company’s new head of business for the U.S. says Oyo heads into the current environment with significant opportunity and momentum.
Kasra Moshkani was elevated to the head of Oyo’s business in the U.S. in early September after joining the company from Uber in October 2019. He said the company is already seeing early wins in a difficult environment, with properties now seeing 92% of pre-COVID-19 pandemic revenues and adding 8,000 rooms to its U.S. portfolio since the start of 2020.
He said that success has been based on an approach of focusing on experience and technology.
Oyo’s U.S. portfolio now stands at more than 300 hotels with nearly 20,000 rooms in 37 states, recently adding properties in Las Vegas (the Oyo Hotel & Casino) and New York (the Oyo Hotel Times Square).
Despite difficult business conditions across the board, Moshkani said he believes the current environment is an advantageous one for Oyo.
“We do see this as a unique opportunity,” he said. “Understandably, a lot of owners are thinking about how their business has been shaken up. Travel dynamics have changed quite a bit. So we do see a lot of owners who are looking to partner—in particular some of the independents—who can use a partner to be successful.”
He believes continued outperformance will fuel portfolio growth.
“Through the track record we’ve proven and the track record we’ve shown, we’ve actually had some partners convert multiple assets (to Oyo brands), which is exciting,” he said.
Growing through challenges
In early 2020, there were highly publicized cuts and restructuring at Oyo, as Oyo Hotels & Homes founder and CEO Ritesh Agarwal said in January that the company “did get ahead of ourselves” in 2019 amid fast-paced global growth and major investor Softbank calling for cuts to bolster profitability.
But Moshkani said that upheaval is now behind the company, and operations within the U.S. in particular have reached a point where the scale called for a more formalized and established corporate infrastructure.
“I would say that is settled, and part of what we think about there is how do we grow sustainably,” he said. “Our growth ambition today is as strong as it has ever been, and some of the results coming out of (the current pandemic) validate that.”
While the company seeks to operate with the scale and systems of a large company, he said it remains as “nimble” and entrepreneurial as a startup.
“If you look at our business, it evolves over time and changes and goes through the various life cycles of a company fairly quickly,” he said.
Moshkani said the goal is to have the best of both worlds.
“What we strive for is delivering a world-class experience,” he said. “Wherever you go and stay at an Oyo, you’re going to get a great value and good experience there, so in that sense we want to run it as a well-established big company in order to deliver that consistency of experience.
“But at the same time, we continue to build our technology as we adapt to the market and deploy in new cities and states and countries. And in that sense, we’re going to operate like a nimble startup.”
While the company enjoys a sizable portfolio in the U.S. already, Moshkani said it’s currently tilted more dramatically to the “South and Southeast” regions of the U.S., and he’d like future growth to reflect great geographic diversity.
“We’re newer in some of the other markets, so I think as we make investments, those will be some of the areas in particular that we focus,” he said, calling out the West Coast, Midwest and Northeast, in particular.
What drives explosive growth
Oyo’s entire U.S. portfolio was built in roughly a year and a half, Moshkani said, and when asked how the company structured the deal to win that quick expansion, he said it’s more about the results the company can deliver.
“I’d say on the execution front, the fact that we've grown as much as we have around the world and have brought that model to various countries, including the U.S. is I'd say one piece of it,” he said. “The other piece is we do leverage technology quite a bit. Technology bleeds through everything that we do on a day-to-day basis.”
He said that includes “deploying technology for hotel pricing and having algorithms there that are data-driven and dynamic, such that, we're responsive to very local market moves, and can capitalize on that on behalf of the asset owners.”
He expects continued organic growth for Oyo.
“One of my beliefs as a leader here is that if every single day you're adding value to your partners through your partnership, then that word of mouth will get around,” he said.
And even though the company has grown quickly, it still has some work to do in terms of establishing brand awareness.
Lessons learned from past experiences
Before coming to Oyo, Moshkani had no experience in the hotel industry, which he doesn’t view as an impediment in his role. He noted that similarly before joining Uber, he had no experience with “transportation or logistics” but was drawn in by the challenge and opportunity of scaling a disruptive business.
“That notion of deploying technology and approaching a market in a different way is certainly something that I enjoyed (at Uber) and saw a parallel here,” he said.