Q&A: How has COVID-19 impacted hotel giant OYO?

Edited by – Tom Wadlow and Dani Redd


If one industry has been ravaged by the coronavirus epidemic, it is hospitality. 

Subject to worldwide lockdowns and restrictions of movement, it is only now that some major tourist-providing economies such as the UK are opening up. 

It is a crisis almost nobody anticipated, but one which has fundamentally changed the way hotels and hospitality venues will operate in the future, with capacity limits and hygiene measures critical to a destination’s ability to attract and welcome guests safely. 

Last year we spoke with Indian hotel brand OYO Hotels about its surge into China, where the coronavirus originally broke out. This time we caught up with Dr Mandar Vaidya, CEO Japan, South East Asia & Middle East at OYO, about the current climate. 

Asia Outlook (AsO): What strategies has OYO deployed in Asian countries to weather the COVID-19 storm?

Dr Mandar Vaidya (MV): In this industry, maintaining the trust and confidence of guests is key, and this is reflected in the guest-first approach OYO is taking through our new protocols, in order to provide reassurance and peace of mind to guests.

All aspects of the customer journey especially on hygiene and cleanliness is being relooked at going forward. Contactless experiences will be important. We also believe that travellers will demonstrate preferences for hotels, restaurants and lodging facilities that communicate enhanced sanitation and hygiene protocols. The focus is on being clinically clean. 

Technology would also be a factor. As a hospitality company that has invested significantly in technology, OYO is well positioned to leverage this for our partners.  

AsO: In what ways has OYO been helping keyworkers and local communities?

MV: OYO is deeply concerned with the spread of COVID-19 and the impact it has on people and businesses around the world. The hospitality industry has been impacted and we are also concerned with the impact COVID-19 has on our partners. Our responsibility as #TeamOYO compels us to come out in full support of everyone connected to OYO as we navigate through this difficult phase. 

OYO has identified a large number of our hotels to partner with hospitals for setting up safe, pay per use quarantine facilities. Others are focused on providing safe shelter to tourists and travellers who are stranded in certain areas owing to the lockdown for the greater public good. 

We have started a fund internally and are also contributing to other external funds to support the fight against coronavirus across different parts of the world.

OYO in South East Asia has set up a dedicated Fund of $200,000 to support our partners whose lives, families and businesses are infected and impacted by this pandemic. I will also contribute a portion of my salary to this fund.

To support medical and health COVID-19 frontliners in Mindanao, OYO is offering discounts to practitioners from hospitals within a five-kilometer radius of its partner properties. The company is also closely coordinating with BPOs and other businesses for accommodation for their employees, and with stranded foreign tourists affected by the lockdown.

In the Philippines, we are offering accommodation at discounted prices to practitioners from hospitals within a five-kilometre radius of our hotels in Mindanao. In response to the need for more accommodations raised on social media and by local government units and NGOs, 24 OYO properties in Mindanao were reopened. We have also worked with the office of the Vice President, Leni Robredo to open dorms for frontliners in Quezon City. 

In Malaysia, we are offering complimentary rooms to medical practitioners at three of the busiest public hospitals treating COVID-19 cases in the country. For government employees and those working in essential services, we are offering relaxation of up to 50 percent across OYO hotels. Additionally, we have reached out to embassies and consulates to offer discounted tariffs for tourists and guests who need a place to stay.

In Indonesia, we have opened doors to healthcare front liners from RSPAD Gatot Soebroto, one of the nine hospitals in Jakarta designated as COVID-19 handling facilities. We are also exploring the possibility to extend the free rooms to other designated hospitals in Jakarta. We are also reaching out to embassies and consulates to offer discounted tariffs for tourists/guests who need a place to stay.

We have taken a series of measures to accommodate foreign nationals stranded in the country as well as provide support to frontline medical staff, aircrew, corporates, tourists, PGs, etc. who need accommodation. We reached out to more than 15 embassies in order to support the Ministry of Tourism in efforts to secure shelter for all travellers in need across the country. 

OYO stands in solidarity with all OYOprenuers and our partners around the world. Our effort reflects the organisation’s culture and values, which we hope, would spur others to do their part during this challenging and uncertain time. 

AsO: Can you speak a little more about the OYO Welfare Fund, and what it has been used for?

MV: Proceeds will be used for the benefit and welfare of the employees at our properties, asset partners and their staff members impacted by the pandemic. In the long run, it will also be used for the welfare of the community at large when faced with such situations. 

Through this welfare fund, OYO employees have the opportunity to contribute voluntarily to help those in need. The OYO leadership team and company are further contributing INR 2.5 crore (INR 25 million) to the Indian PM CARES fund to support millions of people with healthcare, infrastructure, and other facilities. The company has made global investments worth of approximately $3.5 million or INR 25 crore in the fight against COVID-19 and pledges to continue doing all it can to support those in need.

OYO in South East Asia also announced a dedicated fund to support its partners and their families in the region who have been afflicted by COVID-19. The setting up of the fund for SEA follows a dedicated fund of more than a million RMB in China to support infected employees and their family members. 

The fund, set up with a dedicated commitment of $200,000 by OYO in South East Asia, will cover partners and their family members impacted by COVID-19. 

AsO: In what ways has the coronavirus caused OYO to adapt its plans and strategies for growth and development in the near future?

MV: Our business is constantly evolving and innovating. The pandemic has forced us to rethink and review every aspect of our business and make the right decisions required for its success. We have put together an improved model that promises to deliver better value and greater efficiency to the business. The decision is in the best interest of all stakeholders to maintain business continuity amid the economic pressures. 

In preparation to face the protocols of the new norm, we have rethought every aspect of our business and will continue to consider all options that enable us to succeed and contribute towards the success of our partners and the communities we serve. Our goal is to get back to our core purpose – providing clean living spaces at affordable prices – and we will continue to move towards that goal.

Preparing early is key to weathering the storm and I am confident we will emerge in a position that sets us on a path towards long-term success. 

AsO: Pre-coronavirus, OYO was one of Asia’s fastest hotel chains. What do you think explains its success?

MV:
SEA is a strategic growth market for OYO globally. We are constantly looking at being a long term wide-scale impactful and sustainable company for our customers, our asset owner partners, our stakeholders and our OYOpreneurs. 

Like in India, there was a massive dearth of affordable and good-quality hotels in the unbranded budget hotel category in the region. OYO’s success is down to fulfilling the need for affordable, clean living spaces outside of the main cities. Guests trust our brand and we are already known for pioneering effective solutions tailored to their needs.

We are also present in towns and cities where the bigger chains are not. We look forward to strengthening our footprint across the country with a diverse portfolio and relentless commitment towards delivering more choice and delighting our guests with exceptional customer experiences. 

We are focused on bringing OYO’s successful model of combining design, hospitality, and technological expertise, financial acumen and operational capabilities to real estate owners in more cities and towns in Malaysia, giving them the ability to get a higher return on investments, access easy financing opportunities, transform their hotels, and offer good quality customer service, thereby significantly increasing occupancy and profitability – in every OYO building, with the OYO promise of AC, free Wi-Fi, TV and clean linen for all travellers. 

For our customers, we’re committed to deliver beautifully designed, chic and comfortable living spaces at hard-to-ignore prices. We are committed to build on the success of our business model and work with small and independent asset owners to upgrade unbranded hotels into quality living spaces and offer them at affordable prices in the best locations across the region. 

AsO: Do you feel optimistic about recovery over the next 12 months?

MV: The entire global economy is hurting, and OYO is not immune to the effects of this global pandemic. We exist in an ecosystem of partnerships and interconnected businesses, many of whom are feeling significant pain. 

it’s too early to tell what the impact on occupancy rates will be, but we have studied trends and data In countries who have lifted isolation protocols and we see as many as 90 percent of those ready to travel want to start domestically, as experts point to safety fears and the desire to be near the security of home as driving forces in consumer decisions.

We expect the same pattern in SEA, and we see domestic travel whether for business or leisure kickstarting the recovery for the hospitality sector in the region.  

As economic activity resumes, we are starting to see an uptick in bookings from business travelers and also local tourists at a majority of our properties in countries where the isolation protocols have been lifted. During a recent long weekend in Vietnam, we saw a double digit increase in occupancy. 

It will still take some time before we return to pre-covid levels. Unlike the bigger chains and network hotels who may be present in the major cities, OYO’s presence extends beyond the main cities and to second and third tier towns and provinces across SEA, which adds to our appeal as the hotel of choice for business travelers and locals alike. With our network and reach, we expect the pace of recovery to be faster for us compared to hotels in the four to five-star category.