Travel and Tourism industry is facing the biggest problem with travel bans worldwide due to novel coronavirus. Oyo is one the biggest names in the hospitality sector and this has caused them to reconsider their properties. Oyo, backed by Softbank Group will have to rework on its expansion plans as well because travel seems like a far-fetched idea even after the lockdown is lifted.
The sources told that Oyo does not plan on existing the market rather it will either terminate or stop renewing contracts with non-profit making properties. This plan began last year itself where Oyo started letting go of loss-making properties. The company is also looking at letting go of employees for cost management in countries where travel does not seem likely.
This does not appear to be good news for the startup considering they started expanding recently into Europe, Southeast Asia and the United States. The sources said that the company’s priority in terms of investment and business will be India, Southeast Asia, Europe, China and the United States while maintain a brand presence in other markets like Japan, Brazil and Mexico.
Oyo has taken jobs from around 5000 employees from India and China from beginning of this year until March and changed contracts with hotels helping them to halve their expenses from $80 million to $40 million. They plan to further bringing it down to $25 million by June with other cost-cutting strategies. Ritesh Agarwal, founder, Oyo also told that there has been 50-60% drop in the revenue since the pandemic began.