COVID-19 pandemic have shaken up the global economy and young Indian startups is no exception. They are going through very hard time right now. Several young Indian startups are now facing a death knell due to contractual technicalities and indifference from co-working major WeWork.
COVID-19 pandemic has wreaked havoc over the global economy. The worst sufferers are young Indian startups who have been going through quite a hard time. There are many young Indian startups which have been facing several issues because to contractual technicalities and indifference from WeWork.
Just about a few weeks and a global pandemic that the strategy became a deterrent for customers and a also becoming a big liability where the company has no scope for any further setbacks. Most of WeWork offices are open, however, there are hardly people coming in than before.
WeWork customers are required to pay 30% of the rent during the lockdown period which was started on March 25, 2020. This does not mean that customers are getting a discount of 70% in the rent but WeWork is offering to give a credit equivalent of 70% to their existing contracts. Therefore, customers will continue paying the entire amount of monthly rent despite not using the co-working space. After the lockdown ends and things stablize, WeWork will add the extra days to their contracts which is equal to 70% of the rent for the days its offices remain shut.
With all the current loss in the business for the startups, WeWork is adding to the hard time and taking rent despite the offices are closed. If this continues, many of the startups will face a huge loss and in the verge of closing.
OYO has slashed salaries of executives at senior and top-level. According to the company’s statement, its founder and CEO Ritesh Agarwal has taken a 100% pay cut.
Global economy is facing a very hard time right now due to COVID-19 and hospitality industry is hit very badly. One of the world’s top hotel’s chain OYO, that is being funded by Softbank is no exception.
OYO has slashed salaries of executives at senior and top-level. According to the company’s statement, its founder and CEO Ritesh Agarwal has taken a 100% pay cut while the entire executive leadership took a voluntary pay cut beginning at 25%.
“Given the current business situation, which is unprecedented for our industry globally, I am foregoing 100% of my salary for the rest of the year,” Agarwal said.
Many senior team members are opting for an additional uncapped amount, and some going up to 50% to enable building the runway for the company, the release added.
Although Oyo hasn’t decided to lay off staff at this time, the SoftBank-backed company had reportedly fired about 5,000 staffs globally in the past three-four months to control burn and bring efficiency. Like other hotel brands, its business in the 80 countries it operates in, including China, has been witnessing less than 20% occupancy rate for several weeks.
Several companies in the travel and hospitality sectors had already executed layoffs and slashed salaries.
MakeMyTrip and Ixigo slashed salaries significantly while TravelTriangle and Fab Hotels executed layoffs to counter the challenges amid the lockdown to stop the spread of the COVID-19 pandemic.
If this lasts for a bit long, then it will have very much significant effect on global economy. We hope to see some significant change in the situation once things are in place again.
The deal is with 50 hotels in the country for more than 3,000 rooms across seven cities.
OYO Hotels and Homes have started operating in Saudi Arabia. The deal is with 50 hotels in the country for more than 3,000 rooms across seven cities. The announcement comes following the arrival of Saudi Prince Mohammed bin Salman in India on Tuesday.
OYO has signed a memorandum of understanding (MoU) with the Public Investment Fund, Saudi Arabia. The hospitality major also plans to set up two OYO Skill Institutes – one in Riyadh and another in Jeddah – to train graduates in hotel management.
OYO Rooms, commonly known as OYO, is India’s largest hospitality company consisting mainly of budget hotels. It was founded in 2013 by Ritesh Agarwal and has since grown to over 8,500 hotels in 337 cities in India, Malaysia, UAE, Nepal, China and Indonesia.
Commenting on the development, OYO Hotels & Homes Group CEO and Founder Ritesh Agarwal said: “We are committed to creating quality, affordable living spaces, and thousands of jobs for the young people of Saudi Arabia. It has been our long-standing belief that provided with the right direction and tools, smaller assets can also generate positive returns.”
This expansion, therefore, is in line with company’s quest to support Saudi Arabia’s blossoming hospitality ecosystem and creating infrastructure for asset owners to grow and run successful businesses, all of this while ensuring high standards of quality, he added.
The company obtained its foreign investment licence from Saudi Arabian General Investment Authority (SAGIA) few months ago and plans to invest significantly in Saudi Arabia, and expand to over 17 cities across 6 provinces by 2020,” SAGIA Governor Ibrahim bin Abdul Rahman Al-Omar said.
From a regular 17-year-old to the owner of a million-dollar company at the age of 22, Ritesh Agarwal’s story is what fantasies are made of.
A friend’s destination wedding in Jodhpur had just wrapped up. As guests began to leave, we friends hung around our hotel terrace, enjoying the beautiful view from the top and sipped onto steaming masala chai. Another friend brought out what looked like a bottle of moisturizer with OYO printed on it in bold orange letters and began dabbing the sweet-smelling liquid onto herself in the pleasant winter sun. “I love these complimentary cosmetics, man. Dibs on the pouch.” Our host had booked OYO rooms for us and with its well-kept rooms and prompt service, it was just about perfect. The knowledge that our generous host did not have to lose a limb to afford the rooms let us enjoy the wedding guilt-free. Perhaps this is how Ritesh Agarwal, the founder of OYO, has called dibs on a huge section of tourists in the country.
High quality rooms, good service and affordable prices – just the perfect mix to win over a tourist. You’d think that for a company to cater so well to its customers, it must have been an old market player with a legacy of family-run businesses. It’s not. The brain behind the company is 24-year-old Ritesh Agarwal who founded the company back in 2013 when he was only 19.
From a regular 17-year-old to the owner of a million-dollar company at the age of 22, Ritesh Agarwal’s story is what fantasies are made of. Ritesh was born in a Marwari family in Bissamcuttack, a small town in Odisha. Even as a kid, he yearned to do his own thing. It was this love for entrepreneurial living that led to a 13-year-old Ritesh selling SIM cards.
“As a young kid (growing up in Rayagada in Odisha), I had the aspiration of doing something exceptionally different. A lot of people say if you have limited exposure, you’re handicapped. But I got more opportunities when I grew up in that place because as a young kid, more often than not, people would compare you on the basis of age rather than skills,” he said at the Odisha Investor Meet in Bengaluru.
Studying for his engineering entrance exams in Kota, Ritesh knew from the start that the conventional was not for him. More than his books, he was excited by the young and enterprising world around him. He would sneak out to Delhi from Kota every weekend to meet entrepreneurs.
At an age when most of us were busy securing admissions into colleges, some of us still confused about the career choices we were making, Ritesh Agarwal decided to listen to his heart. It was now or never. A good idea should never be made to wait.
Much has been talked about the fact that he did not complete his graduation and dropped out of college. Not many know that it was this very fact that made him eligible for the Peter Thiel fellowship, something that, in Ritesh’s own admission, proved to be crucial in his journey as an entrepreneur. “The¬ acceptance rate is lower than the Ivys, but the catch is that you have to drop out of college,” he reminisced while speaking at the Techcircle Startup 2015 convention. Ritesh was the first Asian resident to have won the fellowship.
In an interview with Economic Times he talks about how the month-long fellowship at Stanford taught him to ‘think big’. As part of the fellowship, he also received a grant of $100,000.
In 2011, at the age of 18, he founded Oravel, a platform for booking budget hotels, that later became OYO. How much experience and skill could an 18-year-old have? What he lacked in years, he compensated in experience and research. For months, Ritesh travelled across the northern part of the country, staying in budget hotels himself, doing first-hand research, talking to customers every single day to learn the problems and expectations of his customer base. Those who know him well know of his trademark backpack that he carried everywhere he went, even to investor meetings – it was his home in a bag; he wouldn’t know where he would be spending the night each day.
He was spending his savings on room rent staying at bed n breakfast apartments. Not everybody let a young entrepreneur stay for free as part of market research for his venture. Speaking at the Techcircle Startup 2015 convention, Ritesh talked about how that was a huge learning experience for him and he knew he had to stay put despite his diminishing bank balance at that moment. “My family was well-off and it’s not like they couldn’t have helped me, but the problem is if I had picked up the phone, being 18 years old, and told my family ‘Guys I’m broke’, the first thing they would’ve told me is to come back home.” It was a choice he had to make – it was now or never.
The young man left no stone unturned in understanding the budget hotel industry and it finally, showed results. Oravel Stays Pvt. Ltd. was scaled to OYO in 2013.
OYO, which is an acronym for ‘On your Own’, started with one hotel in Gurgaon in 2013. Today, the company has 8500 hotels in 230 cities across India and has even launched in Malaysia. In just 3 years, OYO has been named as India’s largest budget hotel network.
Ritesh’s incredible journey can be best understood in his own words: “At the age of 19, I was clear about one thing – I did not want to build something that was another business. I wanted to create something that created a real impact. And if I lost, out, I would have great learning […] I will not build something that one thousand people kinda like, I will build something that 5 people will fall in love with.”
