Under the epidemic，This has forced many industries to strengthen the cultivation of internal strength，It also accelerated the pace of collapse of many companies。

A company that entered China just two years ago，Once devastated by horse racing and enclosure，Once regarded as a disruptor in China’s chain hotel market，A dark horse in the industry，A bold catfish。

Covering more than 300 cities in 2 years，Accessed nearly 10,000 stores，Far better than home、The total number of stores opened by Hanting and 7 Days over the past ten years；

Strengthen the two major domestic OTA travel websites Ctrip and Meituan，Soft blocked。

Backed by top capital forces such as Japan’s SoftBank，Valuation reaches $10 billion，The combined market value of the two most powerful A-share hotel management companies, Beijing Tourism and Jinjiang Holdings, is not as good as it。

And now，The resumption rate of hotels nationwide has reached about 80%，This catfish seems to be unstoppable:

Over 9,800 employees from November 2019，Just over 3 months，Rapid layoffs of more than 7,000 employees；

8 senior executives resigned，Includes 5 of the 7 executives involved in the founding of the Chinese company；

According to online reports, the number of hotels has increased from nearly 10,000 before，Reduced to about 400。

It is India’s second largest unicorn company OYO，The founder can be called the Indian version of Zuckerberg。

Once arrogant，Now my life hangs by a thread，If it completely fails in the Chinese market，Its global territory will truly lose half of its territory。

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The unicorn OYO is the same as many star companies born under the wave of Internet entrepreneurship around the world，Told a very beautiful story as a foreshadowing。

Ritesh Agarwal, born in the 1990s in the poorest eastern town in India，Took the Chinese name Li Taixi)，Only studied in college for 3 days，With the intention of changing the image of the industry、The ideal business that subverts the industry’s business model。

Soon，He has become a well-known entrepreneurial star in India，Also named the “Youngest Unicorn Creator” together with Facebook founder Zuckerberg。

188bet app Worked as a B&B housekeeper，Worked as a hotel customer service，Finally, he targeted millions of non-branded and individually run hotels in India，He wants to use standardization to change the dirty and messy accommodation environment that is common in this industry、Poor check-in experience、The phenomenon of information opacity。

So in 2013, he founded OYO.

He seized the gap in the standardized hotel market in India，Go to franchise、Entrusted management and leasing operation model，Self-built platform，Win over independent hotels to "join" for free。

and，OYO’s own set of standardized transformation lists focusing on the hotel’s core hardware，So on average, each hotel goes from confirmation of intention to final launch，The average cycle only takes 15 days。

Although the policy may be different in India，But overall OYO taxis are free、Low threshold、Fast，These strategies in the early days of OYO，For individual operators，Too affordable。

As of June 2019, it has more than 2.30,000 hotels，The number of hotel rooms exceeds 850,000，More than Accor、Wyndham and IHG，Jumped from 6th to 3rd place，Second only to Hilton and Marriott。

The number of rooms in the Chinese market，Already accounts for more than half of its global guest rooms。

So Lee Tae Hee is very confident，Will OYO be in scale by 2023、Superior to Hilton and Marriott in three aspects: revenue and profit，Become the number one in the world。

2. Aircraft and artillery bombardment, but now the annual loss is 2.3 billion

OYO’s development history，In fact, it is under the cover of fire from capital aircraft and cannons，A brutal and crazy history of OEM production。

In fact, OYO only does two things: 1、Build your own hotel management and reservation system，Similar to OTA platform；2、OEM branding for hotels，“XXX Hotel” transformed，It became “OYO XX Hotel”，Let dirty and messy stores have hot water、TV、Air conditioner、Network and other conditions，Unified Hardware Standard，Unified employee training, etc.。

For India’s backward hotel industry，This means subversion。

In the Chinese market, OYO can only compete for speed.

OEM production for one store every 3 hours，Online in 15 days at the fastest，In less than 2 years after entering the Chinese market, it has opened tens of thousands of stores，How to achieve such speed？

First of all, there is indeed no shortage of money.

From initial seed round、Angel Wheel，To round E，Including strategic investment，The total money OYO received exceeds 2 billion US dollars，Participating in financing are the world’s top capital forces，Russian redwood、Speed ​​of light、188bet sports betting app download Green Oak，Japanese Softbank Masayoshi Son is very optimistic about Lee Tae-hee again。

Companies participating in strategic investments also have great backgrounds，Has China’s largest hotel management group Huazhu，Travel giant Didi。

Sky Eye Check Data Display，OYO China’s independent financing is US$900 million。

Second, it really burns money.

OYO China has formed a luxurious star executive team: first find the original founder and CEO of Xiaolan Bicycle、Hu Yufei, General Manager of Ele.me Crowdsourcing Division，Ren Vice President；Former Shenzhou Car Rental COO and CFO Li Wei serve as CFO；Later, they successively dug up the original PepsiCo、Yum、Walmart、SF Express、Uber、Mobai、A large number of former executives from Guazi and other companies，But only one of them has experience in the hotel industry，But he has resigned。

It’s July 2019，To get more traffic，OYO China spent another 600 million yuan in “tolls” for Ctrip and Meituan，Relieved the suppression of China’s two major OTA giants，Immediately announced that US$600 million would be invested in the Chinese market。

Incorporating independent hotels in the sinking market，OYO’s investment in acquiring a guest room ranges from 800 yuan to 1,600 yuan，Includes labor、Decoration、System usage, etc.，A hotel with 30 rooms，Invest about 30,000 to 40,000 yuan，Although not too heavy，But it also accounts for the majority。

In 2018, we once created 200 prefecture-level cities in 100 days、Enter more than 600 county-level markets、Myth covering 3500 hotels。

With the rapid expansion of scale，Expenditure consumption is also extremely high，Cost up to 1 per month.500 million yuan，Labor costs account for a large proportion，From May 2018 to May 2019，The number of people expanded 75 times。

OYO’s overall revenue increased from 2% in the 2017-2018 fiscal year.US$1.1 billion，Increased to 9 for fiscal year 2018-2019.US$5.1 billion，But the loss increased 6 times，reached 3.3.5 billion US dollars (approximately RMB 23.USD 400 million)。

Among them，Total revenue from China operations is 3.USD 0.7 billion，Net loss is close to US$200 million (approximately RMB 1.4 billion)。

Local media in India even claimed，Major shareholder SoftBank of Japan has issued an ultimatum，Request OYO before March 31st，Realize the profit before interest and tax of the self-operated hotel business to become positive，Return other ancillary businesses to regular status before June this year。

But limited by its own problems and the impact of the epidemic，I’m afraid it will be difficult to achieve this goal。

3.Losing money and 188bet app download making a profit, shouting and reaping the consequences，False prosperity will eventually be exposed

Whether it is in the Chinese market，It is also the market in India and other countries and regions，OYO’s idea is good，That is, through various standardized actions，And the scale influence formed by OYO，Let all franchise hotels benefit from this situation。

Acknowledged，OYO has indeed helped some independent hotels increase their occupancy rates，But whether it really helps hotel owners create value enhancement is not necessarily，Many signs even indicate，Hotel owners have become victims of OYO’s rapid expansion，The core problem is the excessive pursuit of rapid scale，Only performance，Heavy data，OYO China serious internal injury。

The rapid expansion stage is called 1 by OYO.0 mode，Only charge a certain percentage of commission to franchise hotels，At 2% to 8%。

Although it feels like burning money regardless of the cost，But make it really fast，There is a premise that the change of the image of the franchise hotel is limited to changing the signboard，Add small items such as hotel supplies with OYO words，Does not involve store hardware。

In fact, for many hotels in the sinking market、Hotel，Old hardware facilities、Tatteredness is the biggest flaw。You can just see some decorations that prove that the store is an OYO franchise store，Cannot improve the check-in experience，Even the check-in experience was far lower than expected，There are many negative reviews about hotel facilities on the Internet。

Another important point is，New store development naturally relies on people，is an employee，OYO China has very strict performance appraisals for employees，The core is the number of contracted rooms，If a new employee is required to sign a contract within 20 days of joining，Otherwise you will be dismissed，If the elderly person does not sign a contract within 60 days, he will be laid off。

Under such pressure，The quality of the hotels signed to complete the performance appraisal can be imagined，Many of these hotels that have signed contracts have illusions about OYO，Thinking that unified decoration can be carried out，Disappointed by the result，Many hotels transfer online orders to offline，Avoid commission。

Heavy scale，Do not look at the income，Double quantity，Regardless of contract quality，1.0 mode itself is a vicious circle。

2.Phase 0，Guarantee + Price Control，Intensify the conflict with the owner。

Later OYO realized 1.0 has certain defects，2 more launches.0 mode，The excess of the guaranteed amount will be divided into shares，Unfinished，OYO promises a minimum 188bet sports betting app download income guarantee，But there is one thing，Franchised hotels must use OYO’s hotel management system，OYO has pricing power。

OYO Pricing，That’s a completely low price，The original lowest price room was over 100 yuan for 20 to 30 yuan、Even sold for around ten yuan，Although the room occupancy rate has increased，But revenue fell instead of rising，Because of water and electricity bills、Labor costs and other expenses have increased significantly，Ultra-low housing prices simply cannot cover the cost，Many hotels lose money and rebate。

In this case，OYO still needs to pursue the number of contracted rooms，The threshold for signing hotel contracts is further lowered to more than 15 hotels before you can sign，And OYO has left itself a backdoor in the contract to modify the terms at any time。

For example, one owner said that OYO changed the minimum guarantee amount without authorization，Make it easy for hotels，Then the excess portion will continue to be divided into 50 and 50 according to the original standard，Count it down，Hotels can’t make money，I still want to give money to OYO，The room subsidy originally promised and from Ctrip、Elong、Where to go、The subsidies from travel websites such as Fliggy.com are gone，The store manager’s five insurances and one fund have also been cancelled。

But for OYO salespeople，Only concerned about whether performance targets can be achieved，Low-price rooms are sold out as quickly as possible，In order to get more rewards，The company only looks at transaction data，The owner is responsible for the hotel’s profits and losses。

The final result is，Conflicts between OYO and hotel owners intensify，More and more franchise hotels are losing confidence in OYO，Choose to terminate the franchise cooperation。

No operating rights or price control rights，Income is not as good as before，Suffered losses，You will also face various fines from OYO，This is unacceptable to the owners。

OYO finally launched 3.0，No guarantee，Commission，Weekly settlement。But nothing can be changed，Chicken feathers everywhere。

From the second half of 2019，Many owners and laid-off employees have already begun to defend their rights。

(OYO employees begging for wages at Shanghai headquarters)

I couldn’t see the person in charge, and even threatened to jump off the building.

Employees who were isolated at home due to the epidemic were laid off.

The contract has been terminated, but the account has not been settled to the owner.

OYO has used more than just tricks，For example, it was initially accused of spending money to cheat orders，In fact, the guest rooms are not actually 188bet app download sold to guests；Some rooms for sale may not exist，There are still many stores that have signed contracts and are simply operated without a license... everything is just superficial data。

Brother Dao’s conclusion:

Lee Tae Hee once claimed that “making money is not my main interest，My main interest is in building a sustainable business model，Let Chinese people have a better life，Buy a better accommodation experience at a more affordable price。”

That’s very well said.

But the fact is，There is a problem with OYO’s values，Lack of contract spirit，Lack of respect for the market，Lack of respect for people。

Hotel is a service industry，Service quality is the core，The guest’s accommodation experience is the first priority。

Empower independent hotel owners through franchise，It cannot be achieved simply by OEM，Hardware、Service Quality、Only by improving the overall management level can we truly create value。

Looking back at the domestic Internet entrepreneurship boom，Whether it is O2O，Still a travel service，There are many losers，But there is one thing，Most of them have a premise when they start a price war，Just don’t let restaurant operators or car owners pay for low prices，Even give them more subsidies and rewards，The purpose is to establish strong connections with operators and users at the same time，But some are indeed pseudo-needs，Some are short of money。

Finally, Brother Dao wants to say:

Only by being upright can you be surprised，The fattening false prosperity will soon be exposed；

The paranoid performance orientation will only further encourage false elements.

*This articleSource: Sina Weibo “Golden Mistake Knife”，Author: Jin Cuodao，Original title: "Loss of 2.3 billion，7,000 layoffs！Another wealth-making myth collapses，Chicken feathers all over the ground》.