OYO Changes Business Strategy to Reduce Losses due to Pandemic

Hotel chain startups from India, OYO noted, hotel occupancy which became partners dropped 60% the impact of the pandemic corona. The company was forced to change its business strategy, mainly in terms of partnerships. Before there was a coronavirus pandemic, the company implemented a minimum guarantee (MG) system.

The intended system is to provide a certain amount of money each month to partners, with various market risks. However, OYO has difficulty predicting the risks and potential of hotel occupancy due to the Covid-19 pandemic. The reason, community activities outside the home are restricted. The government implements several policies related to Large Scale Social Restrictions (PSBB) in several regions.

“There are so many different green, yellow, and red zone parameters in each region of Indonesia. To be honest, it makes it difficult for us to predict occupancy potential until the end of the year,” OYO Hotels & Homes Indonesia Country Head of Emerging Businesses Eko Bramantyo said at a virtual press conference, Wednesday (6/17).

The Company Changes Profit Sharing Schemes with Partners

The company changes its scheme to revenue sharing with partners. The amount depends on the market potential and environmental conditions. The company has submitted the amended cooperation scheme to partners.

“Some people did not accept it, think about it first, and there were those who ignored it. That was the response we received very openly because we realized this pandemic came suddenly,” he said. OYO continues to negotiate with partners. He appealed, partners who objected to immediately contact the company directly through the call center, not social media.

Eko claimed, the company had conveyed this to partners via email. “If there is unclear information, we want to solve it together,” he said.

To increase occupancy, the company is also preparing a strategy in order to welcome new normal through a qualification program called ‘Sanitized Stay’. OYO will implement health protocols for its hotel partners to implement.

Users and Partners Complain about Funds that have not been Paid

OYO is also a talk on social media, because users and partners complain about unpaid refunds. However, the company claims to have completed an 80% refund since last year.

OYO Hotels and Homes Indonesia Country Stock Head Carlo Ongko explained, the company is committed to completing all refunds in two categories. First, the refund is due to normal conditions.

The normal conditions in question are consumers ordering (booking), then cancel because of general reasons such as the corona pandemic. “For this category, we can finish very quickly,” he said during a virtual press conference on Wednesday (6/17).

Second, refund due to an unpleasant experience while staying at OYO hotel partner networks. In this case, the company needs to verify the intended partners and related parties. If based on a true review of an unpleasant stay experience, the company will reimburse consumers’ funds.

Only, OYO faces various challenges during the verification process. The challenge in question such as name, cellphone number, or email address that does not match the booking voucher code data listed.

The Company Proactively Contacts Consumers

Even so, he stressed that the company proactively contacted consumers through direct telephone or social media. Over the past two months, Carlo claimed that the company was aggressively responding to user complaints, according to the applicable Service Level Agreement (SLA), which is a maximum of 45 days.

In the past three months, OYO claimed to have completed a refund of 9,000 bookings. OYO Hotels & Homes Indonesia’s Emerging Businesses Country Head Eko Bramantyo added, requests for refunds through social media are often a problem.

The company faced the difficulties to validate user data. He urged consumers to submit refunds directly to the company’s call center, either by telephone, live chat, or email. “There will be a ticket number that makes it easy for us to do tracking (tracing) if there is dissatisfaction or ambiguity, including refunds. We can immediately act on this, “said Eko.