Small hotels will be in vogue after pandemic: Oyo chief

London

THE Covid-19 pandemic will mean holiday-goers will shy away from larger hotels for the foreseeable future in favour of boutique establishments and home rentals, said the chief executive of India-based hospitality startup Oyo Hotels and Homes.

The comment by Ritesh Agarwal underscore the anticipation within the hospitality industry that the novel coronavirus outbreak will fundamentally change the nature of travel.

"The hospitality industry will never be the same again, that is absolutely clear," he said in a video interview with Reuters.

"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."

Oyo, which he founded in 2013 at the tender age of 18, lets guests to book hotels through its mobile app. It also franchises its brand and offers standardised amenities at hotels on its network.

The loss-making Oyo, which is backed by Japan's SoftBank Group, says its network comprises more than 43,000 hotels with over a million rooms across more than 800 cities in 80 countries.

The hospitality industry has been one of the most adversely affected by the coronavirus health crisis; Oyo cut thousands of jobs at the height of the pandemic earlier this year.

Oyo, based in Gurugram in India, has seen some green shoots of recovery, said Mr Agarwal.

"The last four, five months, the company has seen some incremental recovery, especially in geographies such as Europe and the United States," he said.

In the US, where Oyo's customers are primarily truckers, pharmaceutical representatives and essential workers, the company's revenue per available room is around 92 per cent of pre-coronavirus levels. Oyo has seen record sales, he said.

One of India's largest startups, Oyo was last valued at US$10 billion in its most recent private fundraising round last December.

The company has upwards of US$1 billion in cash in the bank and Mr Agarwal said that Covid-19 had not had an impact on any potential plans for an initial public offering.

"We did not have a timeline for going public earlier and don't have one now," he said. "We, of course, continue to keep a close eye on the market and get potential interest in potential capital raise, both private and non-private." REUTERS