The 21-year-old building India's largest hotel network

  • 6 September 2015
  • From the section Business
Media captionHow Ritesh Agarwal built India's biggest chain of branded hotels before his 21st birthday

One night, 18-year-old Ritesh Agarwal was locked out of his apartment in Delhi. It was an unfortunate minor incident that was to change his life.

Forced to check into a hotel he found himself in a situation he had already experienced several times while travelling in India.

"The receptionist was sleeping," he says.

"Sockets did not work in the room, mattresses were torn apart, the bathroom was leaking, and at the end they wouldn't let me pay by card."

"I felt if this was my problem, this had to be a problem for many travellers. Why can't India have a good standard of hotel rooms at a reasonable price?''

Image caption Oyo helps hotels smarten up to appeal to more discerning customers

Four years later, at the age of 21, Mr Agarwal is now the founder and chief executive of Oyo Rooms - a network of 2,200 hotels operating in 100 cities across India - with monthly revenues of $3.5m (£2.3m) and 1,500 employees.

The firm works with unbranded hotels to improve their facilities and train staff, rebrands them with its own name, and from then on takes a percentage of the hotel's revenues.

The owner of the hotel benefits from a higher occupancy rate, thanks to Oyo's branding.

And as part of the business, Mr Agarwal has also developed an app, which guests can use to book rooms, get directions to the hotel, and once they have arrived, to use the hotels amenities, for example to order room service.

Tough journey

Despite such rapid growth, he says the early days were "extremely difficult".

"No one would believe that this could be a technology business in the future," he says.

But some people did believe in him. A similar idea - which eventually evolved into Oyo Rooms - won him a coveted Thiel Fellowship - a programme sponsored by PayPal co-creator and early Facebook investor Peter Thiel - which pays for 20 teenagers each year to stop studying and try to set up a business instead.

He used the funding from the fellowship to start the business.

Image copyright Oyo
Image caption Hotel rooms at the budget end of the market aren't always up to scratch, something Oyo is attempting to address

The firm launched in June 2013 with just $900 (£586; €799) a month, working with one hotel in Gurgaon near Delhi.

"I used to be the manager, engineer, receptionist for this one hotel and also deliver stuff in hotel rooms," says Mr Agarwal. "At night I would write codes to develop our app and improve our website. But alongside this I was also building strong teams because I knew I wanted to scale this up. ''

But the only way he could persuade investors that it was a worthwhile idea was to show them just how bad some budget hotels in India were.

"I took our first investor to the hotel we had developed and the other hotels where there were many problems. He saw the conviction in us and felt good about investing in something which he saw could make a difference.'' recalls Mr Agarwal.

Now the business has grown, it has become much easier to attract investors, and the firm recently secured $100m from Japan's Softbank.

Nonetheless when Mr Agarwal started the company, lots of people told him he was crazy.

"But because it was crazy, it was doable. It's true: if you think crazy stuff that is when it becomes a lot more doable."

Image caption Oyo staff are there to help resolve anything that can't be sorted out via the app

The journey from college dropout to business owner may appear smooth, but he says starting a business at 17 was not easy. Mr Agarwal says normal things like getting a bank account or hiring staff were more challenging. Plus some people saw his age as a chance to take advantage.

'"There were some people who took me for a ride to achieve their short term goals. But I also met some very good people and experiences with them far superseded all the other problems," he says.

Starting young

Mr Agarwal was always ambitious, even from a young age.

He grew up in Rayagada a small town in the eastern Indian state of Orissa, and started writing computer code at the age of eight.

"I used my brother's books, and it was the first time I saw stuff happening on the computer, because of the things I had done. That is when I first felt the excitement of creating stuff from scratch and it never stopped."

By the time Mr Agarwal was 13 he started helping people in his town design websites.

He also wrote a book on engineering colleges in India when he was 17 years old, aimed at helping students choose the right course and college in India.

Looking ahead

Now his ambition shows in his plans for the firm, which Mr Agarwal wants to expand overseas. He hopes to create the world's largest network of hotel rooms.

But he admits it won't be easy, saying recruiting the right people when it is growing so rapidly is tough.

Image caption Ritesh is still the youngest person in his own company

Currently, his focus is on making improvements based on customer feedback, and he remains optimistic about expanding the company at home, saying India's increasing smartphone and internet penetration offers "huge potential".

For those keen to emulate his success, his advice - perhaps unsurprisingly - is to "start early".

"Start really fast and, if you fail, you will learn and the chances of success in the next venture will increase," he says.

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