On the All India Management Association’s (AIMA) 47th National Convention held on Tuesday, OYO’s founder, Ritesh Agarwal, shared the struggle in staying afloat amidst the ongoing pandemic. The unicorn of the hospitality field was recording an immense growth before the coronavirus pandemic struck hard. OYO has now started to aim for a humbler nominal for growth.
How the pandemic attack affected the startup unicorn
According to Mint, Agarwal claimed the pandemic attack was a really strong blow to the unicorn startup. OYO’s structure can originally withstand up to 20% drop in occupancy. The number came from thorough research and related to the world’s last four economy crises.
The coronavirus pandemic, however, caused almost 0% occupancy. Even worse, the pause in occupancy growth didn’t end after a few months. To keep business afloat, OYO proceeded with an abrupt restructuring. With almost zero revenues, OYO needed to shift its focus on maintaining long-term cash savings for survival, as the regeneration in the industry is still unpredictable.
Since late 2019, OYO itself has laid off more than 4,000 employees. Some of them ended with contract termination, while some others receive a cut in their salaries. OYO had to proceed with the decision to keep expenditures and to save more cash in this unsteady situation. With the travel rebounds, OYO has begun to start gradually reinstituting its employees’ wages.
OYO: plan for the upcoming growth and recovery
As a budget-friendly homestay provider, OYO expects a faster recovery compared to hotels and cottages. Agarwal predicts the market in India, Europe, and Southeast Asia will start the bounce back.
OYO further revealed the plan to add more rooms periodically in the platform. The company aims to adhere to consumers’ new travelling culture and demand due to the pandemic. Mint further added that the company’s focus in the meantime falls to customer and partner service.
“…if that means that some part of the growth will get stripped off, we are probably okay with it because we were growing 300% before COVID, and if we grow between 50-100% that’s fine,” Agarwal continued.