2 min read.Updated: 09 Jul 2020, 05:19 PM ISTSalman SH
The hospitality unicorn has suffered significant damages because of the pandemic, forcing it to cut back expenses and lay off thousands of employees across markets, including Japan, China and its home turf in India as well
BENGALURU: Hospitality startup Oyo will focus primarily on European markets, Southeast Asia, and India for fresh bookings as these regions open up domestic air travel and hotels, said a top company executive.
Rohit Kapoor, chief executive India and South Asia at Oyo, said its focus markets in the next few months will also depend primarily on country-level occupancy rates and on other parameters including the extent of spread of covid-19 in each geography.
The hospitality unicorn has suffered significant damages because of the pandemic, forcing it to cut back expenses and lay off thousands of employees across markets, including Japan, China and its home turf in India as well.
"Impact on our business is also directly dependent on the scale of lockdown in each country. Some countries like the US have gone into different phases of lockdown and we don’t see any recovery soon in US since the occupancy rates have not bounced back ever since March," Kapoor said.
Even though Japan didn’t see a nationwide lockdown, Oyo had began withdrawing from the country as it saw resurgence of fresh covid-19 cases, forcing the Asian nation to place stricter travel restrictions.
Bloomberg reported on Monday that Oyo permanently shut its offices in several Japanese provinces, including Sapporo, Sendai, Nagano, Hiroshima and Omiya at the end of June. It is also downsizing operations in the capital Tokyo.
The hotel aggregator furloughed salaries of most of its US staff in June to conserve cash even as the market showed some signs of recovery. In an e-mail to employees, seen by Mint, Oyo’s chief operating officer Abhinav Sinha said the startup will be laying off majority of the furloughed staff in US.
US market’s revenue is still 25% below levels seen in January and that is a setback for the company in a high-growth geography, Sinha added in his letter to employees last month.
Both US and Japan layoffs are a part of Oyo’s global downsizing process that was announced in April. At that time the startup said it plans to cut around 5,000 jobs world over, reducing employee size to 25,000. Mint reported last week that Oyo also ended minimum business guarantee contracts with around 250 hotel owners in India as part of the downsizing operations.
However, Oyo has seen some recovery in hotel bookings in India due to institutional demand for self-quarantine facilities. Mint reported on 25 June that the online travel segment including hotel and domestic flights have seen some demand emerge.
Kapoor said after the first month of re-opening, bookings have started to pour in across the top 20 cities and its outskirts. This demand is mostly from business travellers as well as individuals booking homestays and self-quarantine rooms.
“Although the corporate travel segment is slowing, customers who own small and medium businesses are travelling currently because these are businessmen who want to visit their warehouses or vendors. We have been providing our hotels to nurses, doctors, and travellers from the Vande Bharat international flights from abroad for rates starting from ₹1,500 to ₹2,000 a night," added Kapoor.
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