Hospitality chain OYO Hotels & Homes has exited from several co-working and co-living properties in the past two-three quarters as it attempts to turn profitable and streamline business operations.
The hotel aggregator gave up two co-working spaces spread across 65,000 square feet in Hyderabad, and several others in Gurugram, Bengaluru and Mumbai, The Economic Times reported.
Under OYO Life, which includes paying guest (PG) accommodation, shared flats and co-living spaces, the SoftBank backed startup has closed over 4,000 beds across localities while converting over 1,700 beds to OYO Rooms.
Having hit by Covid-19 restrictions, retaining many of these properties became unviable, the company said. Meanwhile, OYO also explored other cities and locations to start new properties based on demand.
“While we did exit some of our portfolios that were not viable during the Covid period, we have steadily increased our supply to 1.5x of June levels and continue to see growth of 10-20% month on month. Multifold initiatives to improve the experience and performance of the OYO LIFE consumer app have enabled demand scale up to ~80% of pre- COVID levels. As colleges open and people come back to offices, we expect demand to become even stronger,” Ankit Gupta, chief executive officer - Frontier, OYO India & South Asia, told TechCircle.
An industry insider reportedly told the Economics Times that OYO was “clearing its mess” in the hotel business. “It does not want to expand into other categories much. 2020 was a washout year for the industry as people stayed back at home. Both hotels and the co-living business of OYO took a hit due to work-from-home arrangements,” he was quoted as saying.
OYO is currently focusing on strengthening its core businesses and services. Earlier this month, the company offloaded nearly 150 employees from its financial shared services team to research and consultancy firm KPMG. OYO has partnered with KPMG to outsource certain parts of financial operations.
In terms of categories, OYO is also investing in its student housing vertical, OYO Campus and has deals with three IITs in the past few months. It will also provide associated services.
“With more college campuses opening, OYO Campus has seen a jump of 3.5X in terms of revenue and 5X in terms of the number of beds live in the system from pre-COVID levels. Our app adoption in major IITs is almost close to 70% now,” Gupta said.
OYO’s monthly seat sales at OYO Workspaces (OWS) has been growing at 10-15% month on month over the last 5 months. “I am pleased to share that currently, our Workspaces portfolio is trending close to 70% occupancy,” he added.