Oyo in talks with large hotel partners to extend payment timelines

Oyo is negotiating with large hotel partners to extend timelines for vendor payments and is seeking relief from the government along with the entire travel sector in the country amid the coronavirus crisis. Founder and CEO Ritesh Agarwal told CNBC-TV18 that the company will continue to make payments to its MSME partners. The worldwide lockdown due to the COVID-19 pandemic has hit the travel and hospitality industry the hardest, leaving the sector staring at massive job losses and payment delays. Agarwal said that many of Oyo’s 20,000 hotel partners in India who had sought loans to run their businesses have been impacted due to corporate payment delays and landlords not negotiating rents. The biggest worry for the sector is about taking care of staff, he added. “We have sizeable cash reserves and can meet payments for our teams and basic cash flows. But Oyo represents over 20,000 hotels across the country. As domestic tourism grew, many people took debts to set up hotels. They are now seeing corporate payments being delayed, landlords not negotiating on rent. Above all this, the biggest worry is staff,” Agarwal said. The Oyo founder reiterated that the company is talking to large hotel partners on extended payment timelines. “Oyo has broken vendor payment into MSMEs and large businesses. For MSNEs and SMEs, we ensure no payment disruption. For large corporations, we are discussing potential timelines for payments,” he stressed. Agarwal pointed out that the US and several countries in Europe were offering relief packages and support to the hospitality sector and their staff. “The UK, Germany and other nations have come out with significant pay packages for the sector. In UK, around 80 percent of employees’ salaries would be transferred by the government. We are also working with US authorities to get support for our hotels there. Singapore is also focusing on the bottom of the pyramid of the sector,” he noted. Agarwal said that the government needs to immediately defer statutory payments and support especially those employee whose salaries are below Rs 25,000 pay per month. Oyo is working with several states in India to offer space and services to address the COVID-19 crisis. “We are expanding capacity for isolation rooms with Apollo for asymptomatic or part symptomatic individuals. We are also enabling state governments,” he said. The company is also working to help those stranded globally due to the travel shut down. “Sixteen embassies contacted us in the last two weeks. We are working with them as well as several people who have been pushed out of their PGs and hostels to enable their stay,” Agarwal said.