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I agree with your fundamentals. But I don't believe Oyo's execution is right. Nor do I agree with this statement:

> It's a worthwhile bet given the Indian consumers purchasing power/quality expectations are on the rise.

India's income and consumption growth have been slower than expected. A recent report even found that rural consumption in India fell compared to 2011-12, and urban consumption increased by a paltry 4%.

In the last two decades, everyone has been building businesses in India with the assumption that India will continue growing at "China pace". Real estate prices are the best example.

But as everyone is also beginning to find out, the money simply isn't there. At least not for now.

Oyo might be a decade too early. This business needs to be built, but not now

I agree to your analysis of India the underserved market as far as travel & tourism for middle class is concerned.

This would have been all good if the focus was only for that market, but the $10Billion valuation I'm sure is not because of India focus.. it is for claiming to be 2nd or 3rd largest owner of hotel rooms in the world - the problem is there.

Without solving fully by hyper focusing on one problem/segment/market, it decided to conquer the world because of $$ at disposal.

>it decided to conquer the world because of $$ at disposal.

Injecting $ in to a donkey in the hopes it will become a unicorn.

Not all growth is good, some growth is cancer... and it sounds like OYO is basically stage 3.

> It's a worthwhile bet given the Indian consumers purchasing power/quality expectations are on the rise.

Isn't it undergoing a saturation of sorts as of now? Correct me if I am wrong but the general Indian consumer purchasing power/quality is led by employment in IT sector. What happens if there is a severe downturn in it or there is significant competition from other countries?

> Someone is going to build it.

Definitely but if they see profits and positive cash flow in it which I don't think companies like OYO are looking at.

> You can always ask the established chains in the west and they will tell you how long they think it will take.

This is because there is something called standards and inspection in the US. This is absent in India. One just has to look at the shoddy houses and apartments being constructed by some reputed builders.

> But Reliance Jio did it anyway.

With the full support from the Government I think it would be possible. Also is Jio making a profit? ( https://economictimes.indiatimes.com/industry/telecom/teleco... )

Also would Jio be profitable once they achieve their targets?

> Travel along an Indian highway and try to find your standard roadside motel as you would in US ala Best Western. There are no low-mid tier chains.

I agree with you, and I was very bullish on OYO precisely because of this opportunity. However they have executed terribly by really not caring about a quality experience, instead chasing short-term growth.

Looking at Indian social media, OYO's brandname is now associated with a crap experience. It may already be too late, however they could still come out of this by doubling down on customer satisfaction ASAP.

> The textbook on how fast you can scale things is being rewritten

In hospitality, just putting your branded linens into a hotel isn't really "scaling". It's about consistency of experience. And that takes a time and/or a substantial training budget to ensure at least a few people at each site are trained appropriately, and this learning trickles down to every employee/partner.