Indian hotel unicorn Oyo arrived in Brazil in 2019, shortly after having debuted in Mexico, its first Latin American market. In less than a year, without much fanfare, the company earned the title of biggest hotel chain in Brazil by adopting a number of establishments. Since March, however, the Covid-19 pandemic has fallen like a meteor in the travel and hospitality industries, and Oyo is facing a crisis. Its Brazilian division offers a clear example of how the startup is dealing with this challenging scenario and preparing for a reality that will not return to pre-crisis terms at any time soon.
“We focused on cash preservation, as it is essential in defining the difference between surviving the crisis or not,” said Henrique Weaver, head of Oyo Brazil, in an interview with LABS. “We made all possible adjustments, from bringing marketing spending to zero, renegotiating with suppliers, reducing office expenses, and, unfortunately, cutting jobs.”
Its structure in Brazil has shrunk from 700 to 150 employees, and layoffs reached all sectors. “We had to make tough and difficult decisions to guarantee the company’s sustainability. We see this as a cut to be able to grow again, and not as something permanent,” says Mr. Weaver.
One of the biggest gambles by Japanese conglomerate SoftBank, Oyo has partnered up with 43,000 hotels in 80 countries and was valued at USD 10 billion, seven years after it was founded in India by chief executive officer...
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