The effect of the coronavirus has spared none and plagues even the India based startup OYO. While things in China have already looked bleak for the Softbank-backed company, another market that the company has traditionally struggled since launch, is Japan. And the ongoing COVID-19 outbreak is making things worse. But OYO isn’t relenting.
The company has started offering cash incentives to hotels in the country, promising a proportion of revenue that these hotels earned last year, according to a company statement issued on Friday (via Bloomberg).
The offer has come into effect immediately and is active for an undefined time frame. Visitors from South Korea and China, both countries which have been hit hard with the virus, make up for around 50% of Japan’s total tourists. Therefore, due to being placed in quarantines, the number of visitors has dwindles and hotel owners are finding it difficult to keep their head afloat.
The company claims that Japan is an important market and even though it has struggled to establish a strong footing, it will continue to put in more efforts. “Japan is an extremely important market for OYO, and we intend to contribute to it over the long term,” said Ritesh Agarwal, the company’s CEO and founder to Bloomber. “This is our response as a global hotel group to Japan’s lodging industry in the time of crisis.”
Even with the full strength of Japanese conglomerate SoftBank (which already identifies itself as the endorser of the biggest web portals in the country) backing up the startup, OYO has faced nothing but mediocre responses in the country. Amid technical challenges and rebukes from local hoteliers, OYO was never really able to shine. The added plague of coronavirus has pushed numbers back even further, causing the company to resort to such incentivisation measures.
OYO has already been forced to lay off half of its employees in China and officially announced plans to reduce its global workforce by 5000, ending up at 45,000 workers to make up for increasing losses. Areas expected to be most affected by this are India, China and U.S. business.