COVID-19 made the days really hard. Several industries are badly hit by the economic crisis brought by Coronavirus. Every business, industry and consumer brand is already facing and seeing the impact brought by Coronavirus.
In the same way, these are tough times for OYO as it is for the hospitality sector all over the world. However, it is sure that there is no other industry that is worse affected than OYO industries like travel, tourism and mainly hospitality.
“The economic impact brought by Coronavirus is dramatic and has impacted every industry. China is our biggest and single largest market. We have dedicated 1 million renminbi for relief and rehabilitation work in China”, says Aditya Ghosh –Board Member, OYO hotels & homes.
In the past, it is said that the impact of COVID-19 on OYO is a revenue or occupancy drop of 10-15% worldwide. But as of now, the situation continued to be worsening and OYO revenues fall 50-60% over the last few days.
Ritesh Agarwal, founder and CEO of OYO, in his latest interview mentioned the impact of COVID-19 on his firm.
OYO starts furloughs and temporary leaves both in the USA and international markets. In January and February, it laid off 15% of 12,000 work force in India. Now, OYO’s Global workforce stands at 25,000.
Ritesh Agarwal will forgo 100% of compensation for the whole of the remaining 2020. On the other hand, executive leadership takes pay cuts between 25%-50%. So we can easily say that OYO is in tough times. It was also heard that OYO is invoking ‘force majeure’ with some hotel partners. OYO’s net loss for FY19 grew 7x to $335 m.
“The OYOpreneurs who have been tested positive from the Coronavirus infections are less than 10. At the same time, there is a significant amount of effort being taken by OYOpreneurs and their near and dear ones so that they can protect themselves in these tough times. And among these said 10 OYOpreneurs who have been tested positive with this Coronavirus, few of them have already recovered including OYOpreneurs from China, Brazil in Latin America and others” says Ritesh, addressing OYOpreneurs.
In contrast, OYOpreneurs in India reached out to state governments, national government, hospitals and ensured that they are constantly able to bring new kind of innovative measures by means of isolation rooms, helping stranded foreign travelers, helping domestic stranded travelers and ensuring that each one of these people gets a safe good quality place at the right price.
On the other hand, the United States, the UK, Malaysia, Brazil, Mexico, Europe, every country and region across the world has put a step forward to make sure that they do right for the NHS workers, for the frontliners in the US and more.
“I am confident OYO will emerge stronger and more resilient than ever before outside of this crisis” says Ritesh.
Is OYO going to be the next WeWork?
Of course it is the hot topic and marketing world is eagerly waiting for the news regarding the ‘next WeWork to be OYO’.
Japanese multinational company, SoftBank Group Corp. always has an eye on emerging and innovative Start-ups. Recently, SoftBank showed its interest in WeWork and eventually invested in it. Now, SoftBank owns 80% of the WeWork providing billions of dollars to keep it operating.
Experts even say that OYO has been aggressive in the markets of India and China. In contrast, it recently discharged around 1200 employees in India and fired 5% of its workers in China. Statistics say OYO has more chance of facing legal struggles..
According to 2018-19 market statistics, WeWork stands with revenue of $1.8 billion with a fall of $ 1.6 billion. When the same comes to OYO, It stands with revenue of $900 Million with a fall of around $336 Million.
When we go through such statistics, it was clear that OYO is rapidly hitting losses. And, when the question arises, “Will OYO be the next WeWork?” critics say that it definitely might be a ‘red flag’.
Apart from the bad times, if OYO could do well after the crisis it is definitely going to be the biggest among the start-ups from India that works globally.
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