Founded in 2013, OYO Hotels & Homes is already the world’s third-largest chain of hotels, homes, managed living and workspaces, recently having reached a valuation of $10 billion, with a portfolio comprising more than 23,000 hotels and 125,000 vacation homes.
The Indian company has just acquired Danamica, a Copenhagen-based startup that specializes in dynamic pricing through machine learning and business intelligence technologies. This acquisition is in line with OYO’s continued commitment to the company’s global vacation rentals business through strategic investments in technology products, processes, and people.
Earlier in August, the company committed to invest €300 million in the vacation homes business in Europe, with a special focus on strengthening the relationship with homeowners and enabling them with the resources, including technology investments, required to deliver chic hospitality experiences.
Similar to airlines, and ride-sharing companies, OYO has introduced dynamic pricing in the hospitality industry to create a level-playing ground even for an independent or small hotelier or homeowner. OYO’s pricing, inventory allocation, and revenue management are driven by a machine learning-based algorithm for prediction and dynamic pricing. The algorithm analyzes 144,000 data points every hour and makes 60 million price changes every day globally with a prediction accuracy of 97%.
Its technology allows pricing to adjust dynamically to supply and demand. In peak times pricing adjusts to deliver high RevPAR (revenue per available room). In low times, it goes down to allow maximize the number of customers.
With the acquisition of Danamica, OYO will be able to drive growth by leveraging dynamic pricing across all its brands – OYO Home, Belvilla and DanCenter, all of them already at the forefront of vacation rental pricing in Europe. Additionally, OYO and its real estate partners around the world will benefit using data sciences for improved yield. Starting with Europe, Danamica’s technology innovations will benefit OYO’s global vacation homes business.
“We are delighted to announce our acquisition of Danamica, a European, machine learning and business intelligence company specialized in dynamic pricing, that will help us be more accurate with pricing, leading to higher efficiencies and yield for our real estate owners and value for money for our millions of global guests, both everyday travellers and city dwellers, that choose an OYO Vacation Homes as their abode,” said Maninder Gulati, Chief Strategy Officer of OYO Hotels & Homes.
“Data sciences across pricing, AI, and imaging sciences have been a cornerstone of OYO’s proprietary revenue enhancement technology,” added Gulati. “It is also a huge missing piece in the way traditional vacation rentals industry is run. We are glad to have found Danamica, which has built expertise in these areas. Both Rune and Mads are extremely talented individuals and together with their team, they have built a valuable IP that analyses many years of data and pricing trends and provides logical and scientific recommendations, which will help us scale our vacation and urban homes business across Europe and other parts of the world.”
With the implementation of ML-enabled pricing and revenue management, customers will be able to book a vacation home at the best price.
“We are very pleased to announce that Danamica is now part of OYO Vacation Homes family,” said Mads Westberg & Rune Larsen, the founders of Danamica. “OYO’s ambition and growth are extraordinary and we couldn’t imagine taking part in a more exciting journey. OYO and Danamica have a shared understanding of the importance and impact of AI and data science. Like OYO, we recognize the untapped potential in the vacation rental industry that can be fulfilled with a data-driven approach. We are therefore confident that we have found the right home for us in OYO and are excited about the prospect of using our expertise in pricing and machine learning to further help OYO’s continued growth and success.”