At 17, Ritesh Agarwal dropped out of college and left his small hometown of Rayagada, Odisha, with a backpack and a dream. Traveling across India on a tight budget, he stayed in hundreds of budget hotels and guesthouses. The experience was consistently terrible—dirty rooms, unreliable service, and no quality standards. He realized India’s $40 billion budget hotel market was completely broken, serving millions of travelers with subpar experiences. With no money and no connections, he decided to fix it.
The Turning Point
In 2012, at age 19, Agarwal applied to the Thiel Fellowship—a program that gives $100,000 to entrepreneurs who drop out of college. He became the first Indian to win. With that funding, he launched Oravel Stays, which later became OYO Rooms. The breakthrough came when he realized he didn’t need to own hotels—he could partner with existing small hotels, rebrand them under OYO standards, and guarantee quality. This asset-light model allowed rapid scaling across India’s fragmented market.
The Strategy
Agarwal’s strategy was built for India’s unique market. He offered struggling budget hotels a lifeline: OYO would bring them customers, handle technology and marketing, and enforce quality standards in exchange for revenue sharing. He standardized everything—linens, toiletries, Wi-Fi, and cleanliness—creating a predictable experience. He used aggressive pricing and heavy discounts to build customer loyalty. He also invested heavily in technology, building apps and dynamic pricing systems that optimized occupancy rates across thousands of properties.
The Results
By 2019, OYO became the world’s third-largest hotel chain by room count, operating 43,000 properties across 800 cities in 80 countries. The company was valued at $10 billion, making Agarwal the world’s second-youngest self-made billionaire at age 26. OYO revolutionized India’s hospitality sector and proved that standardization could work in a traditionally chaotic market. Today, OYO continues to dominate budget hospitality across South Asia and beyond.
