How Airbnb, Oyo, Treebo are plotting brand journeys in a cluttered market

From budget and premium budget hotels to hostels and home stays, travellers in India have never been so spoilt for choice. The sector that was once the domain of large legacy brands is now a bustling marketplace of small, young players that cater to an assorted mix of traveller needs and demands. But the question is how do brands differentiate themselves so as to offer a distinct value proposition and promise to consumers?

Every brand is finding its own way to mark its niche out. Oyo, the youngest in the list and India’s most recent entry into the unicorn league has sub brands and has built a differentiated offering for different consumer groups. Airbnb has focused on trust and recall, tweaking its app experience and bringing celebrities on board to endorse its properties. Treebo that has focused on branding hotels so far is jumping on to the home stay wagon, thereby extending the brand into every category of the travel industry.

In the new environment, consumers are dictating much of the change. Meet Sanjana Mathur, 26, a Delhi-based architect. Mathur’s work profile requires her to head out of the city and sometimes out of the country, once or twice every second month and she often extends the short business trips into longer leisure ones. When with family and friends, she mostly checks into a home stay, managed by one of the leading brands of the day. “I prefer to do that because I can be on my own without being bound by fixed meal timings or room service. It also gives me an opportunity to explore the city and local cuisine,” she said.

Travellers like Mathur are transforming the way brands stack up on offers, the nature of services they offer and also the way they label their properties. For instance, the home stay category was largely unknown until a few years ago, especially in India. But given its growing currency with young travellers, brands such as Treebo are wading in too.

Technology is also playing a big role in fuelling the growth of the new breed of hospitality brands. India is early on the digital adoption curve for hotel bookings with 17 per cent of the bookings made online today as compared to 45 per cent to 50 per cent in developed markets such as UK, Germany, France and China, but with the increase in internet penetration, there will be immense growth potential in the space, according to a study done by Boston Consulting Group and Google last year. 

Airbnb that has been in the country for just three years, says that the strong run for technology-based brands, reflects the growth and potential that the market presents. “All segments are showing great growth for us—whether it is Indians travelling abroad, or foreigners travelling to India and staying with Indian families or the Indians travelling within the country in unique homes to seek varied experiences,” said Amanpreet Bajaj, country head, Airbnb.  

With 36,000 listings and over 50,000 rooms in India and a presence in more than 100 cities, it has seen listings grow 115 per cent year on year and has identified India as its top growth markets in the world. Oyo, the most valuable brand in the sector after the latest round of funding, is also optimistic of the road ahead. It boasts of more than 125,000 rooms in India and has created a sub brand called Oyo Townhouse. Unlike Oyo rooms, which is based on a franchise model, Townhouse properties are owned by Oyo and managed by its staff. Oyo is also looking expand its presence in markets outside India. 

Treebo, another internet- based start-up in the hospitality segment, plans to double the number of hotels registered on its platform to 800 by 2019 from the current 400, said Siddharth Gupta, co-founder of Treebo. The company is also looking to diversify into home stays and is in the process of initiating pilots for the same.

Vista Rooms that has positioned itself as a premium luxury homestay brand, too is looking for its share in the fast-growing pie. Backed by Google India head Rajan Anandan among others, Vista is looking to grow its number of properties from the present number of 100 to 300 by April 2019 and 1,000 by 2020.  “We want Vista to be considered the Marriott for homes of South Asia,” said Amit Damani, co-founder, Vista Rooms.