Amidst huge controversy，OYO, the hotel brand that has rapidly conquered the country in the past year, has received its first contract renewal test。

OYO, founded in India in 2013, has developed into the largest hotel chain group in India，Its investor lineup includes SoftBank、Sequoia Capital、Lightspeed Venture Capital、Huazhu Group, etc.。

October 2017，OYO China’s first hotel opens in Shenzhen，Officially launched in the Chinese market。According to data disclosed by OYO Hotel Partner and COO Shi Zhenkang not long ago，As of mid-April，OYO China’s existing channel rooms are 400,000，More than 8,000 hotels in total。Less than two years，OYO has ranked among the top five hotel groups in China。Beyond the crazy store opening speed and capital，The controversy and doubt surrounding it have never stopped。

First half of this year，About OYO not increasing hotel occupancy rate、There are endless news about insufficient operational capabilities，Complaints from contracted hotel owners reveal the shortcomings behind the expressway；And the leakage of internal information on punishing corrupt employees，It also exposed the management loopholes of this young company。

For some time，OYO is in such a storm of public opinion，Facing doubts，OYO chooses to publish data。

Recently，OYO Hotel Partner and CFO Li Wei, the first executive to join OYO China, had an exclusive conversation with Tencent's "Perspective"，Disclosed OYO’s latest operating status，Including the renewal rate that attracts the most attention from the outside world。According to data disclosed by Levi，OYO’s speed is still amazing—by the end of April this year，The number of hotel rooms it owns in China has exceeded 450,000，The number of contracted hotels is about to exceed 10,000；Renewal rate，Last year 4、The first batch of large-scale hotel signings in May，At the expiration of the one-year contract，The renewal rate reaches about 95%。

But data cannot answer all questions: Can OYO really bring value to contracted hotels？If OYO does not really satisfy the first batch of hotel owners who are trying to eat crabs，Whether it will lose the trust of small and medium-sized hotels？If you lose trust，So can the story of OYO continue to be told？

For these questions，Levi admits，OYO’s rapid expansion has led to gaps in its backend capabilities，But speed is still one of the important strategies OYO insists on。Although 188bet app it now has 450,000 rooms，But this still only accounts for 1% of China’s overall hotel industry，OYO still has huge room for growth，In OYO’s war in China，OYO’s unique localization strategy will give full play to the role of the local management team。

At the OYO headquarters in Wujiaochang, Shanghai，Conference room surrounded by transparent floor-to-ceiling glass walls，Young OYO employees are reviewing the operating conditions in different cities；The team is expanding rapidly，There is no time to plan and arrange the office building I just rented，The newly joined team has to find free workstations to settle down。

Whether it is internal team building and management，Still offline contract hotel and operation，OYO’s approach is like a train that is already running at high speed before it is built。The injection of capital has reserved enough fuel for this unfinished train，But if you want to run further，OYO has to do more than add fuel to the engine。

The following is the transcript of the dialogue between "Periphery" and Li Wei:

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"Perspective": Is OYO still maintaining the pace of rapid expansion？

Levi: We are basically adding 45,000 to 50,000 rooms every month，Maintain such rapid growth (state)。We had 3,000 rooms in April last year，As of mid-April this year, it will be 400,000 (rooms)，Now it is 450,000。

"Perspective": What is OYO's overall expansion pace in the past year？

Levi: Before May 2018，OYO is trying to open a few stores in Guangdong，Make some small attempts，Large-scale recruitment did not begin until May，Before this there were only 200 people in the country，And most of them are studying some issues at the headquarters，Not even a technician，All base Shenzhen，In a shared office space。

Start recruiting in May，Start full-scale expansion in June，From 3 cities to more than 280 cities in just six months。Open the city at the same time，Let the team pick it up。

Before September last year, it was 2 per month.50,000 rooms、Growth rate of 30,000 rooms，Start to accelerate after September，Always maintaining 40,000 new additions every month、The rhythm of 50,000 rooms。This has to do with people，People are in place，The process is correct，That’s it，Because the market is big enough。Even if it is 450,000 (room) now，Only 1% market share。

"Periscope": What is the current status of hotel contract renewal?

Levi: First of all, our real large-scale contract renewal will be in April (this year)、Starting in May，Many people asked me before (renewal rate)，But we haven’t started renewing contracts on a large scale yet。

We have started renewing the contract in April，Because we still have the last ten days or so before expiration in May，The final data has not yet been determined，But now it seems that it is already higher than 95% (renewal rate)。

"Perspective": This 95% renewal rate refers to the hotels signed in April and May last year，Every new month，In fact, a batch of new hotels will expire，So the renewal rate is changing dynamically？

Levi: Yes。By the end of 188bet online sports betting May 2018, there will be about 10,000 rooms，Based on the average of more than 40 rooms in a hotel，About 250 hotels。

Speed ​​is still important

"Perspective": OYO has encountered a lot of doubts in the past period，Are these problems caused by speed？How to determine the strategy of rapid expansion？

Levi: We have also been talking about this issue in the past two days。From last year to now，Let’s look back and see if we need to slow down at some point，No one thinks we should slow down now，Although now we see this gap，Back to September last year、October，I must know it，But now we are in this period，We must capture the market first。

Two truths，The first is related to the competitive landscape，This is what China does，Now OYO has entered 15 countries，Entering the United States、The European way is completely different from China，You can try it as a family and take your time，Because there is no competition。

The Chinese market is different，If you do it slowly, someone else will surely do it，But OYO has done this now，It’s already difficult for others to chase me away，Can still catch up，But give us another six months，Everyone gave up，This is a matter of competitive landscape。

The other one is where the owners’ big demand is，Many people have seen the problem of low occupancy rate of owners，There is no way to solve it，We must seize this opportunity，OYO’s sacrifice is that the commission is now very small，But we must continue to spread it。

In fact, there is another very important truth，Now we see a lot of benefits，When 450,000 rooms are in hand，Data is huge，The city is also paved more densely，So there are much more data on consumption and portraits of different owners，I will better understand the needs of the owners，Where are the needs in different places，can help us continue to improve the production line。

Speed ​​also builds our brand to a certain extent，One is cognition，One is cognition，One is a good reputation。

"Periscope": Speed ​​may be a very important label for OYO，Will there be a very important label next?？

Levi: I don’t think this label will be taken away，This strategy must be something we must stick to in the long run，And there is even a chance to speed up on the basis of doing other things well。But，I hope you can see more tags，Our internal speed is not called a label，Speed ​​is the prerequisite，The real label is our four core competencies。

"Periscope": You mentioned it yourself just now，There will be some gap between speed and subsequent operational capabilities，How to bridge this gap？

Levi: several，The first thing we haven’t changed，It is building four core capabilities (development、Renovation、Operation、Distribution)。For example, let me turn it around，demand side，Because we don’t have such a big one、The good premise is that I already have a membership system，Then I need to build this demand side myself，The demand side includes revenue management，Includes access to more channels，It takes time to connect the system，188bet sports betting app download We have done more now，More efforts to build ourselves、Automatic ability to do online operations。

"Perspective": OYO said that it will bring sales to them through its own channels，But now based on experience, your own online channels are not fully open，How do you ensure that the occupancy rate can really increase？

Levi: We just started the membership system in April， APP just started to exert its power slowly。I think this amount is as long as you know how traditional hotels are made，I don’t think you need to worry about this，It’s a matter of time。

If the owner now gives us the full inventory and full frame，The improvement in his RevPAR (revenue per available room) is obvious。We now directly operate 60 hotels，The average occupancy rate is above 65%。

The second one is that the APP still needs time，The effect of increasing volume has not yet been highlighted。

Third，Demand side There are many things we have not done better，There are many things that can be done in offline sales，walk in is also working hard。

"Perspective": Some owners reported that your offline operations manager，They don’t check the revenue data reported every month at all，The owner can quote as much as he wants？

Levi: This is because some hotels use two PMS systems，Owners can hide a little bit of income，This does not meet the requirements for cooperation between the two parties。Many things are a process of gradual improvement，We will increase supervision in the future，Provide hotel owners with a better-use system。

Completely localized

"Perspective": Has OYO's overall strategy in China undergone any major changes?？

Levi: I think it has always been consistent from a strategic perspective.

Four strategies to enter China，The first one is the lighthouse strategy，The countryside surrounds the city，Must occupy the market quickly first，Because the market is big enough，And this is related to OYO’s consistent strategy。The so-called consistent strategy is that South Asia and China are two home markets，Must grab it first。

Second，Our goal must be small properties，That is, less than 80 rooms are the main ones。Of course we also have some exclusive privileges now，Quasi Samsung，Because everyone has this need，But the core is small property，Small property turns out to be a blue ocean，No one is watching。

Third，Must pursue cost-effectiveness，It is the competitive advantage，Our goal is to be at the same location or very close to each other，Price better than Hanting、Home Inn、7 days、Jinjiang Inn and other hotels are 20%-40% cheaper。When the price is cheaper than him，We don’t talk about hardware and services，Talk about the final customer experience，There must still be a bit of a gap now，But the difference should not be 20%-40%。

"Perspective": Four strategies just mentioned，Lighthouse Strategy、Small property、Pursue cost-effectiveness，The fourth one is？

Levi: The last one is our localization decision-making and localization team，This is very important，Of course there is no need to talk too much 188bet online sports betting about this strategy now，Because this has been completed。

There are several biggest differences between our localization model and that of other companies such as Uber，First，Uber is still a multinational enterprise in a new economy，Global above，China will send several core leaders，Establish R&D center，But the underlying technologies of the enterprise are not all separated。All our technologies now，China and India are two completely independent things，The above does not matter，There is no linkage in the middle，Uber has never done this。

I think this is a very unique organizational form of OYO，Use China as a headquarters，Now the headquarters in China and the headquarters in India are parallel，We are called two home markets。

"Perspective": Do other countries also use this strategy for localization?？

Levi: None，Only China is like this。I think Ritesh (Founder of OYO) is very good，He let China’s technical team compete with India，Who did a good job，This platform will be used in more other countries。Now Japan is using some of China’s resources，Because we have done a few parts quite well。So the ultimate technology platform，From OYO to the world，Both headquarters will support different things，Some low-level tools may use different things。

"Perspective": How the OYO China team is organized and run now？

Levi: How many pieces shall we divide now，Headquarters Business Development、Engineering transformation、Operation and distribution four blocks。All ground troops，Each region has a person in charge，There is a person in charge of the urban agglomeration，The person in charge of the city agglomeration will have the managers of each department in each city agglomeration，Then they report both ways。

"Perspective": I was actually quite surprised when I looked at the backgrounds of your executives，This is a company with a very down-to-earth business，But you are looking for professional managers with working background in foreign companies，Is there any misalignment?？

Levi: We didn’t see it wrong at all。Whether it is Shi Zhenkang，Still Zhu Lei (Chief Revenue Officer of OYO，Chief Revenue Officer，They have previous experience in FMCG，Their refined management、Exceptionally strong ability in refined operations，Ability to be data-driven。

"Perspective": You are a very large team offline，How to expand quickly，How to manage？

Li Wei: Our offline team is mainly driven by large-scale data，On the other hand, keep the bottom line。

"Perspective": You were aware of the corruption problem when you came here in September last year？

Levi: Many new economy companies，As long as the company has money to spend，I was fooled into a mess。OYO went from 1,000 to 2,000 to 7,000 people，Going up in a few months，How can I just leave it alone？

China will raise funds independently and does not want to become an OTA in the future

"Perspective": Is there anything different about SoftBank's investment in OYO last year？

Levi: In fact, SoftBank entered the OYO world very early，188bet online sports betting Entered in 2015，Last year it was like SoftBank invested in China alone。600 million of the US$1 billion was invested in China alone。

"Perspective": What impact will such investment have on the equity relationship？

Li Wei: From the equity relationship, you can think of OYO as a global concept，Among them, US$600 million was invested in China alone。From the management relationship，OYO global includes two headquarters in China and India，It is a parallel relationship，The two headquarters are separate。

"Perspective": Will OYO China raise funds independently?

Levi: We will consider it，Definitely consider it，Because it is now an independent capital platform。

"Pianwang": In the process of launching your business in China，What help did investors provide？

Levi: Mainly through collaboration with some partners.

"Perspective": What do you think of the relationship between OYO and OTA？

Levi: Actually the biggest difference between us and OTA，What OTA does is to solve needs，We are going to improve the quality of supply，Let more hotels sell more on OTA，Isn’t it pretty good？We didn’t think so much，Because China has a lot of hotels that can be renovated，And you see our vision，Not doing OTA，My vision is to find the intersection of China’s real estate and hotel industries。

Our first step now is hotel operation management，The next step is to do，In fact, it is also derived from the intersection of real estate and hotel industry。

"Perspective": You are relatively firmly positioned in the category of hotels？

Levi: Very determined，All Internet thinking and feeling say I want traffic，Actually you want to make money、To solve the problem，You are solving the problems of these properties。Our positioning is very specific，Let’s do this。For OTA，You will see a change in their attitude。

"Perspective": You just said that making money is very important，Do you have a clear plan to make money?？Let’s talk about the current stage？

Levi: Just look at the pattern。Through technical conditions and management methods, as well as better control of the hotel，Make people more efficient，For OYO，Increased profit margin of single guest rooms，The bigger the hotel is，The pattern is working，This business logic is simple。

"Perspective": You strongly believe that technical capabilities can improve these efficiencies, right?？

Levi: We don’t need to believe it，Already proven，Now India is human efficiency plus its takerate (referring to the proportion of total revenue the platform obtains from a certain transaction volume)，Already making money。And the scale is smaller than ours，There are now more than 200,000 people in India，That’s half of China，The scale effect is not as big as China，Make money in India。

*Source of this article:Tencent "Periscope", author of this article: Han Yimin, original title: "Perspective，We can sacrifice commission》.