SoftBank-backed hospitality major Oyo Hotels & Homes (Oyo) said on Monday that its annual loss for the fiscal year (FY) 2018–19 increased more than six times to USD 335 million, compared to a net loss of USD 52 million for FY 2017–18.
The Gurugram-based company posted a 4.5 times year-on-year increase in its consolidated revenue to the tune of USD 951 million for FY 2018–19. The company said its revenue from India—its strongest market—grew three times to USD 604 million. India contributed 63.5% to its overall revenue while earnings from global markets—largely from China—contributed USD 348 million to its total income.
“As we work towards consistently improving our financial performance, ensuring strong yet sustainable growth, high operational and service excellence, and a clear path to profitability will be key to our approach in 2020 and beyond,” Oyo global CFO Abhishek Gupta, said in a statement.
Oyo has been laying off its employees in India, China, and the US across departments as part of its loss cutting and restructuring mandate. “Over the past weeks, we have been reorganizing our teams across businesses, functions, and geographies in line with goals and objectives for 2020, and beyond. As we drove tech-enabled synergy, enhanced efficiency, and removed duplication of effort across businesses or geographies, unfortunately, some roles at Oyo had become redundant,” Gupta said in a blog post.
Oyo increased its net loss in the India market from USD 50 million in FY 2018 to USD 83 million in FY 2019. However, it said its losses reduced from 24% of revenue to 14% in FY19. Almost 75% of its net loss comprised of its investments and expansion in international markets including China and other global markets, which contributed USD 252 million to its overall loss. Oyo is present in 80 countries, including the US., Europe, UK, India, the Middle East, Southeast Asia, and Japan.
The company, which claims to the world’s third-largest hospitality company, has courted troubles on different fronts, including raids from tax authorities in India, protesting hoteliers for non-payment related issues, and anti-competitive business practices. Last month, a New York Times article said the company has partaken in unethical practices such as listing unavailable properties and inflating numbers, among others, to fuel its expansion.
In November last year, Oyo received a go-ahead from its board for USD 1.5 billion investment from SoftBank and RA Hospitality, increasing its valuation to USD 10 billion.
