OYO's Margin War with OTAs
OYO Rooms
This relationship shows that OYO is not just a hotel brand, it is fighting a margin war over who owns the customer. OTAs help OYO fill rooms fast, especially when entering new cities or smoothing weak demand, but every OTA booking means paying a commission to a platform that also offers hotel owners a simpler alternative. That is why OYO built its own app, website, loyalty program, and pricing engine to pull repeat demand back in house.
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For a hotel owner, the tradeoff is concrete. An OTA mostly brings traffic and takes roughly 15% to 20%. OYO usually takes more, around 20% to 30%, but also puts the hotel on OYO OS, changes pricing, manages inventory across channels, and imposes brand standards that can raise occupancy if execution is good.
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The MakeMyTrip case showed how valuable distribution control had become in India. India's competition regulator investigated and in October 2022 said MMT Go and OYO had an arrangement that led to delisting of FabHotels and Treebo from MMT Go portals, then imposed monetary and non monetary remedies.
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This pattern is common in travel, but OYO sits deeper in operations than a normal marketplace seller. Sonder also uses OTAs while pushing direct bookings, yet Sonder controls stays through leased or managed inventory. OYO instead sits between franchisor and marketplace, so channel mix directly affects both take rate and partner loyalty.
Going forward, the winners in budget lodging will be the companies that use OTAs as customer acquisition, then convert that traffic into repeat direct demand. OYO's next phase is less about adding listings everywhere, and more about making OYO OS, loyalty, and brand consistency strong enough that hotel owners accept higher take rates because direct demand is materially better.