US: According to the CEO of Indian hospitality chain OYO, Ritesh Agarwal, a recovery is visible in its US and European markets, though holidaymakers are likely to shun large-scales in favour of home rentals and boutique hotels as the Covid-19 pandemic remains in circulation.
OYO’s RevPAR is around 92 per cent of pre-coronavirus levels and the brand has reported having seen record sales.
The chain was hit exceptionally hard by the pandemic, as its initial valuation dropped to $8 billion and the company laid off 90 per cent of its furloughed US workforce. Two executives from SoftBank, the global investment bank responsible for much of OYO’s growth, were brought in to supplement OYO’s new Japanese arm – OYO Japan.
However, due to the company’s demographics in its American and European markets, it is beginning to see recovery. Many of its American hotels are mostly inhabited by truckers, pharmaceutical sales representatives and essential workers.
Agarwal told The New York Times: “The hospitality industry will never be the same again, that is absolutely clear. Small hotels are going to be in vogue. In my view, small is going to be the new big, wherein people will rethink a lot about going back to that 1,000-room hotel versus going to a 40-room niche hotel.”
He added: “The last four, five months the company has seen some incremental recovery, especially in geographies such as Europe and the United States.”
With travellers’ preferences shifting towards home rentals, a recent report by data providers AirDNA and STR highlighted how the asset class is weathering the pandemic better than hotels in 27 global markets due to economic and business travel reasons.
Although OYO is believed to have over $1 billion worth of funding available, Agarwal has said he does not have any plans to take it public for the foreseeable future, but it is looking for additional capital.
He told Reuters: “We did not have a timeline for going public earlier and don’t have one now. We of course continue to keep a close eye on the market and get potential interest of potential capital raise, both private and non-private.”