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    Oyo has a new worry - Coronavirus

    Oyo has a new worry - Coronavirus

    Oyo has a new worry - Coronavirus
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    By Mugdha Variyar   IST (Updated)

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    Ritesh Agarwal-led Oyo’s business has taken a beating in China, as 60-70 percent bookings for Chinese New Year cancelled because of coronavirus outbreak in the country.

    Ritesh Agarwal-led Oyo’s 60-70 percent bookings for Chinese New Year made in countries such as Japan cancelled because of coronavirus outbreak in the country.
    The Chinese New Year is the peak time for tourism industry in China, but several cities this time are on lock-down because of virus spread that has claimed more than 200 lives in the country so far.
    Oyo has grown into one of the largest hotel chains in China, and operates over 10,000 hotels across 320 cities in the country. The company recently undertook a restructuring, laying off 5 percent of its 12,000 employee base. It also undertook same measure in India.
    A source at Oyo told CNBC-TV18 that 60-70 percent of the bookings that Chinese travellers made for the Chinese New Year holidays in countries such as Japan have been cancelled.
    Oyo's China business is expected to see property contribution margin for 2020 at $460 million, though losses are expected to reach $716 million, according to a recent valuation report of the company.
    However, China business is expected to post profits of $384 million in 2022 and $1.65 billion by 2024.
    "This is usually a big period for Oyo, but close to 70 percent of the bookings have fallen through, and many of these travellers are now moving to Japan," the person cited above said.
    Several employees have also not been coming to work at the corporate offices in the country with the government extending the holidays and because of health scare, the source added.
    Oyo, along with several other companies operating in China, said it has started temperature testing at its facilities.
    "OYO Hotels (Jiudian), China, puts the safety and health of the employees and customers at the highest priority and will do everything in our capacity to provide our customers a safe lodging experience,” the company said in a statement on Friday.
    “We have been actively communicating with employees and customers in China from day 1 by sending all guidance and safety measures related to the virus, including reporting any positive detections. The temperature screening and adequate quarantine facilities are in place once employees join back after the Chinese New Year holidays."
    "We have assured that OYO will provide support and aid to all the employees including their family members who are infected by the virus. Moreover, as a responsible corporate citizen, OYO Hotels, China, have further volunteered to join the relief forces in affected areas.”
    For its customers, the company said, it has communicated safety and precaution to all, along with free cancellation during the whole Chinese New Year period.
    The company said it has provided sanitary supplies, one-time-use bed sheet, medical masks, etc, to certain OYO hotels in affected areas.
    “We stand side by side with government, local community and partnering hotels to do everything in our capacity to fight against the epidemic," the company added.
    SoftBank-backed Oyo has seen frequent turbulence in recent months, with the company admitting it "went ahead of itself" last year, which led to about 2,000 employees being given pink slip this month.
    The company is also facing several allegations of impropriety with news reports citing several serious concerns at the company, which founder Ritesh Agarwal has said the management will look into.
     
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