How does Oyo
ExclusiveIndian hotel group Oyo stops expansion
The billion dollar start-up Oyo from India is stamping its expansion plans for Germany again. A team in Berlin tried to convince hundreds of hotels to cooperate last year without any countable success, former employees reported to Capital (issue 4/2020, EVT March 19). At the end of the year, Oyo then moved to Norbremse: some employees have found accommodation with a subsidiary or have left the company, others were fired beforehand, insider reports.
The withdrawal is a severe setback for the Indian company, which has become one of the largest hotel chains in the world within a few years. Oyo cooperates with small hotels, which it equips with uniform furniture. It ensures a high occupancy rate via its booking platform and receives part of the income for this. Well-known venture capitalists like Softbank value Oyo at $ 10 billion. However, the company is currently in crisis mode: According to Bloomberg, it is dismissing around 5,000 employees in order to become profitable more quickly.
As recently as last spring, CEO Ritesh Agarwal spoke of “enormous potential” for the German market. In fact, a strong growth course was planned, every month Oyo wanted to gain about ten hotels, says a former employee. Months later, there are only two hotels left. A hotel manager, who compared Oyo's conditions and the additional income, says: “It just didn't pay off for us.” The argument of higher occupancy also didn't work, explains an ex-employee: “In Berlin, most hotels are complete booked up."
Oyo is now investing in another business: it bought the holiday home broker @Leisure from Axel Springer for EUR 370 million. When asked, Oyo confirmed the change in strategy: They are now concentrating on the brokerage of holiday accommodation.
The message comes from the new Capital, which appears on March 19th. Here is the Subscription shopwhere you can order the print version. Our digital edition is available atiTunesandGooglePlay
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