Go OYO or not? XMU CONSULTANCY TEAM Susan, George,

Transcript:Go OYO or not? XMU CONSULTANCY TEAM Susan, George,:
Go OYO or not? XMU CONSULTANCY TEAM Susan, George, alex, phil Key Issues Shall Michel Apply a Joy in OYO? Can OYO reach succeed in USA? Challenge 1: Low market share Challenge 2: High cost Challenge 3: Capital demand (Big Initial investment) Solution Solve the long term problem Cost reduction Revenue increasing Win-Win for stake holders, Owner, customers, OYO, new partners! For Michel, You can apply position with OYO, suggest BDM! Agenda Analysis--Market Global stay room nights continuosly increase. Main increase place China. Analysis- corporate performance Realised value and the revenue is sharply increasing The losses of realised % is decreasing from 44.5% to 10.4% Analysis--Profile Analysis Industry Key sepciality, Price and Occupancy—keep price 10percent lower, increase the occupancy three times, return still roughly 2.8times. Market Growth---i.e. US hotel market 10th consecutive year growth Market India---largest branded network of budget hotel, commission 22%; India---173,000rooms in 259 India cities China---in less than2years, become largest hotel group in China, China-- by expending to 450,000rooms and 320 cities, most of Tier ii to tier VI US—21% non branded hotel market 1. Others---Like British and Japan Analysis—Business Model Hotel OYO Customer Operation Brand Renovation Customer Low price Standard and good service Room Book platform Revenue Analysis—US Cost and Income Structure Analysis—Strength and Weakness Alternatives Evaluation on Alternatives Reposition to target High-End customer to increase Revenue Non-go option! Evaluation on Alternatives Merge & Acquisition We are shortage of capital already!! Non-go option! Evaluation on Alternatives Seeking partner to launch JV Financial partners A go option! But the partner to be evaluated! Evaluation on Alternatives Long-term benefits while no dramatical investment is required A go option!!! But not enough! Fully usage of big data to optimize operation manage Recommendation Solve the long term problem Cost reduction & Revenue increasing Win-Win for stake holders, Owner, customers, OYO, new partners! Implementation—Financial JV Implementation—Financial JV Implementation—Big data improvement Implementation—Big data improvement Implementation—Job issue of Michel Implementation—Job issue of Michel Time Mapping Financial Funding history Increasing expanding in the world,especially in China need a lot of Capex Without the profit from key business, need the cash flow from financing Turn the operational Cash flow need on the considering Financial break even test Breakeven point =10000000/(80*0.7-16) =250000rooms =1667hotels Now we have 50hotels almost 750rooms Need another 1617 hotels and 249250rooms Funding choice According the build Capex for renovation about US$200000,we need US$323.4M Add the Big Data research Base in America spending