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Oyo losses widen to USD335 million
Indian hospitality unicorn Oyo Hotels and Homes posted a four-fold increase in revenues to US$951 million but also saw losses widen.
Results for the financial year ending in March of 2019 saw losses increase to US$335 million from just US$52 million a year earlier.
As a percentage of revenue, net losses widened to 35% from 25% in 2018.
It shows the risks in all-out accelerated expansion at all costs.
"The inherent costs of establishing new markets, including those related to talent, market entry, operational expenses, resulted in an increase in Oyo’s net loss percentage," it said in a filing.
Oyo has only recently been getting serious about ‘sustainable growth’ and has taken a pause with wholesale layoffs across its biggest markets.
More than 2,000 employees have gone in India, China and the US, as a new business strategy kicks in prioritising profit over growth.
Losses in India have declined
"In mature markets like India, the focus of the company is to maintain strong brand preference while ensuring we have a clear path to profitability, enabled by accretive growth," the company said.
Oyo has a global inventory of about one million rooms across 80 countries in franchisee, leased and some owned assets.
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Editor for TravelMole North America and Asia pacific regions. Ray is a highly experienced (15+ years) skilled journalist and editor predominantly in travel, hospitality and lifestyle working with a huge number of major market-leading brands. He has also cover in-depth news, interviews and features in general business, finance, tech and geopolitical issues for a select few major news outlets and publishers.
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