“Goa may be the new Thailand, ” says Ritesh Agarwal as OYO pivots to a new strategy — ‘driving, and not flying, destinations’
OYOfounder Ritesh Agarwalsaid that the company is focusing on new kinds of travel, at the India Today e-conclave.
- With people not ready to fly anytime soon, OYO wants to capitalise on the tourism spots that people can drive to as a weekend getaway.
- OYO’s wish to be the number one hotel chain in the world is now a delayed ambition. Agarwal said that OYO now has ‘measured business aspirations’.
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And now, the 27-year-old founder of OYO Ritesh Agarwal knows he has no other choice but to change his strategy. “The coronavirus has impacted 1-2 quarters of our growth trajectory. We are now focusing on new kinds of travel, weekend travel which requires driving rather than flying," he said in the recently held India Today conclave.
Agarwal said that within the travel industry, aviation is impacted the most. With people not ready to fly anytime soon, OYO wants to capitalise on the tourism spots that people can drive to as a weekend getaway. "Coorg will be the new Switzerland, Goa will be the new Thailand. If we predict these trends correctly, while market size may shrink, we will have a good opportunity to use our model,” he said.
OYO now has ‘measured business aspirations’
Right before the coronavirus pandemic, OYO was in recovery mode from a number of issues – rising complaints from hoteliers about delayed payments, disgruntled customers and more. In January 2020, OYO laid off thousands of employees and announced that it was now focussed on profitability.
But then came coronavirus.
In the beginning of April 2020, founder Ritesh Agarwal announced that the coronavirus pandemic has hit their business by a much bigger margin than what he had imagined. Earlier Agarwal had estimated a 15-20% drop in revenues and occupancy over Covid-19. However, the company’s revenues dropped by over 50%-60% globally.
“Our immediate response was to try and cut the controllable costs like marketing, capital expenditures and so on. At the end when we realised that that was not enough, we had the view we would stay away from any kind of layoffs but unfortunately we had to announce some furloughs,” he said.
But that also means OYO’s wish to be the number one hotel chain in the world is now a delayed ambition. Agarwal said that OYO now has ‘measured business aspirations’. “At this point of time, it’s very hard to predict your growth plan. We are reviewing and evolving our business plan as times go. But in the long term, we remain confident about creating a large scale business. We will focus on some of the key strategic markets – India, South East Asia, China, Europe and the US,” he said.
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