While the India numbers have started to look up, the global operations drained Oyo, albeit “China and other international markets were in development and investment mode during that time”. They contributed 75 percent of the global losses and 36.5 percent of the revenues. Oyo also made a few expensive acquisitions. It bought Leisure Group from Axel Springer in a $415 million deal to target the vacation rental market in Europe, and spent $135 million to buy Hooters Casino Hotel in Las Vegas.
The company seems to be focussed on sustainable growth and not reckless expansion. In a call with reporters, Oyo board member Aditya Ghosh said the company will not immediately expand to new markets. It has also stopped operations in about 200 Indian cities. The company is also focusing on quality of services. It had drawn flak from consumers for poor services at some of its premises.
More recently, a New York Times report highlighted Oyo’s toxic work culture spurred by a growth-at-any-cost outlook. That has changed. “As we work towards improving our financial performance, ensuring strong-yet-sustainable growth, high operational and service excellence and a clear path to profitability will be key to our approach in 2020 and beyond. The company’s increased focus on corporate governance and building a high-performing and employee-first work culture will also drive this next phase of growth,” Abhishek Gupta, global CFO at OYO Hotels & Homes, said in a statement.
First Published: Feb 25, 2020, 09:37
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