INSUBCONTINENT EXCLUSIVE:
On Monday, budget-lodging startup Oyo reported a loss of $335 million on $951 million revenue globally for the financial year ending March
31, 2019, and pledged to cut down on its spending as the India-headquartered firm grows cautious about its aggressive expansion.The
ambitions to be in a clear path to profitability this year, said Abhishek Gupta, Global CFO of OYO Hotels - Homes, in a statement.But the
Its consolidated loss at $335 million in FY19 rose over sixfold from $52 million in FY18
In India, where Oyo clocked $604 million in revenue in FY19 (up 2.9X since FY18), it was able to reduce its loss to 14 percent (from 24
Most of them filed their financials in early October.The startup, which today operates more than 43,000 hotels with over a million rooms in
800 cities in 80 nations, said its expansion in China and other international markets contributed to the loss
constituted 36.5 percent of the global revenues
statement.Aditya Ghosh, who served as a chief executive of the startup and is now a board member, said in a call with reporters that since
Oyo entered a number of markets last year it was in the growth phase and that needed some investments
Speaking especially of China, Ghosh said the company, like many others, is watching the outbreak of coronavirus that has resulted in
shutting down some hotels.He also said that Oyo has pared back from some markets, including India, where it pulled out of about 200 cities
The startup is currently not looking to expand to any new markets, he added.It is now working on improving its gross margin
recent months for its aggressive expansion in a manner that some analysts have said is not sustainable
The startup, which rebrands and renovates independent budget hotels, has also engaged in sketchy ways to sign up new hotels, as documented
Several hoteliers have claimed that Oyo did not honor its agreements and owed them money.In 2019, Oyo, which counts Airbnb among its
investors, expanded in Europe and the United States among other markets
It also announced plans to invest another $335 million for this effort
In the same month, it announced it had acquired the Hooters Casino Hotel Las Vegas for about $135 million in its first United States
property purchase.It also entered Japan in a partnership with SoftBank
Bloomberg reported on Sunday that Oyo currently has about 12,000 rooms in the country, far fewer than its ambitious 1 million target.In
laid off at least 3,000 employees, mostly in India, in last three months
