Oyo Hotels, one of the largest start-ups in SoftBank Group’s portfolio, is promising cash to hotels in Japan that join its platform as bookings plunge in the coronavirus-stricken country. The Indian start-up, looking to get more hotels into its network and expand its reach, will pay new members a lump sum equal to a proportion of their past year’s revenue, the company said in a statement on Friday. Dubbed Oyo Partner Support Program, the offer is available immediately and will run indefinitely, the company said, without giving further details.
Oyo has struggled in Japan despite having the full endorsement and support of SoftBank’s ubiquitous brand. The SoftBank name is on one of the largest wireless carriers, Japan’s leading web portal and the Fukuoka SoftBank Hawks, which have won five of the last six baseball championships. Oyo’s push for rapid growth in the market was hampered by technical problems and a public backlash from hotels, leaving it far short of its targets.
The coronavirus outbreak has contributed to a dramatic retrenchment in China, where Oyo is cutting about half of its staff. The company is reducing its global workforce by about 5,000 jobs, to 25,000 people as part of a worldwide overhaul.
Founder and Chief Executive Officer Ritesh Agarwal has said he is prioritising improved relations with hotels and stronger corporate governance. Tourists from China and South Korea, among the hardest-hit by the virus, account for nearly half of overseas visitors to Japan. The country’s tourism industry is also bracing for the likely delay of the Tokyo 2020 Summer Olympics.
“Japan is an extremely important market for Oyo and we intend to contribute to it over the long term,” Agarwal said in the statement. “This is our response as a global hotel group to Japan’s lodging industry in the time of crisis.”