OYO venture in Latin America to turn digital-only, SoftBank moves out

Budget hospitality startup OYO on Friday said it will change its current hotel service model in the Latin American region to a digital-only service due to a shift in business strategy caused by current challenges posed by Covid-19.

OYO now wants to mainly focus on growth markets of India, Southeast Asia, Europe, and other challenger markets of the United States, and China, a spokesperson told TechCircle.

While the Gurugram based company does not expect any disruption to its existing guest’s reservations, it added that the change in the service model will lead to job loss in the business unit.

“Operations in LATAM will be reduced to only hotels supported remotely with additional details being disclosed soon and as a result, Softbank Latam (SBLA), will no longer be involved in the business operations. We will be in touch with our hotel partners, guests and other stakeholders in the coming days with more information regarding the transition,” the spokesperson said.

Read: OYO on cash runway, IPO and renewed focus on hotels, holiday homes biz

While hotels in the region can still operate under OYO’s brand, operations will now be managed directly from OYO’s home base in India, as per Reuters, which first reported the development.

Late 2020, SoftBank was reportedly taking a more direct role in the virus-hit hospitality startup through a joint venture in Latin America to manage about 1,000 hotels. 

OYO’s operations in Latin America include over 1,000 properties across Brazil and Mexico. In Brazil, it operates 450 hotels with a total of 12,000 rooms, and in Mexico it operates 650 hotels with a total 12,000 rooms.

As of October 2020, it has served over 2 million guests in the region.