Ritesh Agarwal, Founder-Owner of OYO Hotels & Homes (File Image)
Oyo Hotels & Homes is backing out of “unviable” assets and ventures and focusing on areas that are profitable, as 2020 was a “washout” due to the coronavirus pandemic.
The hospitality startup has exited from co-working, co-living and rental housing (Oyo Life) spaces across India over the past six months in a bid to boost profit and consolidate its core business, sources told The Economic Times.
Moneycontrol could not independently verify the report.
Among the properties in question include exit from two ft co-working spaces in Hyderabad and more in Bengaluru, Gurugram and Mumbai; while from its Oyo Life business, the startup has permanently shut 4,000 beds and converted 1,700 others into Oyo Rooms, sources added.
A senior executive told the paper the moves are aimed at “realigning business” adding: “We are still identifying more properties as the focus is on profitability.”
Another source said internal directions are to “let go of bleeding assets to become sustainable.”
This comes as 2020 was a “washout year for the industry,” an industry person said, adding: “Oyo’s hotels and co-living businesses took a hit due to work-from-home arrangements.”
Ankit Gupta, CEO, Frontier, Oyo India and South Asia told the paper the company optimised its supply network and exited unprofitable properties, but denied that Oyo Life inventories had been converted into Oyo Rooms calling the numbers “inaccurate.”
He also confirmed Oyo’s exit from some co-working spaces, including those in Hyderabad, due to COVID-19 impact and “changes in micro-markets”, but added that they have also added properties in Bengaluru and Noida to “sustainably grow this business.”
“This is more an optimisation exercise than one that cuts back or shuts down arrangements. Given the COVID-19 impact, we’ve evaluated our offerings from a lens of quality, scalability, cost viability and profitability and taken decisions to exit properties where we are not able to create value for our partners,” he added.
