The hospitality industry has been one of the worst-hit due to COVID-19. The pandemic left the sector heavily crippled and forced many businesses to take some really tough decisions. OYO is no exception!
It is reported that the Indian-origin unicorn OYO is also headed down a similar path as all of their Japan entities is set to merge under a single consolidation.
As the COVID-19 pandemic forced people to quarantine themselves at home, business slumped to a huge extent for OYO both at home and in foreign companies such as Japan. Thus, in order to survive and keep their operations running, the Masayoshi Son’s SoftBank Group-backed OYO will be reorganizing their operations in Japan which will be headed by a newly appointed Chief Executive Officer.
OYO has planned to restructure its hotel-booking aka OYO Hotels and apartment-rental units aka OYO Life under a single banner and company which will be called OYO Japan. It will be spearheaded by Ryoma Yamamoto as the CEO with Ryota Tanozaki who will be acting as his deputy. Both of these individuals have been serving in existing roles under OYO operations and they have now been promoted to senior roles.
The Indian-origin hospitality startup unicorn was able to easily expand to Japan which has now become one of its major focal points, all thanks to Mayoshi Son’s association with the brand of SoftBank.
It launched in Japan in April 2019 via OYO Life which is a rental service for furnished apartments that aimed to remove the hassle of guarantors and security deposits. Yahoo!, finding it promising, ended up buying a 30% stake in the company’s Japan entity, however, within eight months, sold it back to OYO and cancelled the joint venture.
The company announced that they were hoping to expand very aggressively but the onset of COVID-19 ultimately ended up thwarting their efforts.
By the end of June, the startup was observed to be laying off their employees from its regional offices in Japan. They started closing offices in provincial centres such as Sapporo, Sendai, Nagano, Hiroshima and Omiya.
At that point in time, the Chief Business Officer for OYO Hotels made a statement wherein he stated that the company was also looking forward to significantly downsize its operations in the Tokyo headquarters which occupied two entire floors in an office building and was situated at a walking distance from the Imperial Palace. He also added that the moves were a part of OYO’s overall ongoing effort to downsize internationally and adapt to much smaller tourism industry.
The current leader of OYO Hotels’ Japan division Prasun Choudhary will step down and resign after which Yamamoto, who oversaw OYO Life, will assume responsibility for the merged business.
A spokesperson from OYO commenting on this situation has said that OYO believes that it is high time they merge their operational capabilities and technology that have been built by their teams in Japan. The company also believes that integrating both arms of their businesses in Japan will lead to strengthening their overall value proposition for their asset partners as well as guests.
Furthermore, the spokesperson added that the OYO team in Japan has built technologies which include an instant home leasing platform, local revenue partner integrations, on-demand cleaning services, real estate services vendor network, dynamic pricing engine, and many more.
Overall, OYO is caught in rough weather due to the worldwide spread of Coronavirus that has bought the complete hospitality industry to a complete standstill. In the last few months, the company has either offered salary furloughed or laid off thousands of employees in a bid to cut expenses.