Hospitality chain OYO has given upto 100% discount to some partners or property owners whose financials have been affected by the Covid-19 crisis.
The Bengaluru headquartered company offered Rs 24 crore ($3.1 million) worth of discounts to over 3,000 patrons as of Monday, according to a statement. It has continued to make weekly payments and reconciliation settlements from March, irrespective of past dues at the property, the statement added.
The SoftBank-backed company did not respond to TechCircle’s query on the selection criteria for the discount.
The startup has launched several initiatives to support its asset owners, at a time when the hospitality business has almost reeled to a halt due to Covid-19.
“We are taking several measures to assist and support our asset owners across the country. Despite the significant economic pressures on the industry, OYO is committed to doing what it can to help its partners during these testing times,” Sharad Saxena, chief supply officer of franchise business at OYO India and South Asia, said in the statement.
To ensure adequate financing for the additional requirements of hotel transformation, upgradation, capital expenditure and working capital, the company has partnered with multiple lending institutions in India, ranging from non-banking financial companies to private sector banks and fintech companies, it said.
Last month, OYO’s parent entity Oravel Stays received $807 million from returning investors SVF India Holdings and RA Hospitality, as part of its ongoing $1.5 billion funding round. RA Hospitality is an investment entity owned by OYO founder and CEO Ritesh Agarwal.
Earlier this month, the company reportedly laid off hundreds of employees in the United States across multiple divisions, in expectation of a long hiatus in the region’s hospitality business.
Around the same time, Agarwal, in a video message and letter to employees and other stakeholders, said that the company will place some ‘OYOpreneurs’ on furloughs. The Covid-19 outbreak has severely impacted its business globally, he said in the video, adding that the occupancy rate and revenues of hotels owned by the company had dropped by over 50-60% since earlier this year.