INTERNATIONAL BUSINESS

Impact of Pandemic on Indian Companies operating in

foreign & their Recovery

Industry – Tourism
Sector – Hotels Submitted By:
Submitted To : Chirag Saxena
Shraddha Ma’am Company – OYO
MBA(General)
 Objective
• The outbreak of COVID-19 is labeled as a black swan event which has caused
significant damage globally due to its fatality.
• The COVID-19 pandemic has expanded across the world by creating shocks in
almost all the industries due to the restrictions, lockdowns, stay-home and
work from home policies and quarantines.
• As a result of the health and economic crisis in the COVID-19 pandemic, the
tourism sector got severely affected.
• The UNWTO has estimated a loss of approximately 1.1 billion international
tourist arrivals, with a loss of US$ 910 to 1.1 trillion export revenues and 100-
120 million jobs due to the wider spread of the novel coronavirus.
• Therefore the objective is to determine the impact of the COVID-19 outbreak
on the tourism industry especially on Hotel sector on a global scale.
 Introduction
• Traveling is the most entertaining way to meet strangers and explore new
places if the route is free of illness, crime, and catastrophes.
• Epidemics and pandemics are two of the most frightening news for travelers
or planners.
• In such cases, it may be difficult or impossible to avoid the disease.
• Besides, not only the travelers but also other people they contact during the
journey are at risk.
• Passengers play a serious role in the transfer of epidemics or pandemics
between locations.
• In recent months, the world is focused on epidemics due to the emergence of
a new coronavirus.
• The pathogens are highly infectious and mutate quickly.
• As a result, new & unexpected outbreaks can occur at any unexpected time.
• OYO Rooms (stylised as OYO) also known as OYO
Hotels & Homes is an Indian multinational
hospitality chain of leased and franchised hotels,
homes and living spaces.
• It was founded in 2012 by Ritesh Agarwal.
• OYO initially consisted mainly of budget hotels.
• As of now, it has more than 43,000 properties
and 1 million rooms across 800 cities in 80
countries including India, Malaysia, UAE,
Nepal, China, Brazil, Mexico, UK,
Philippines, Japan, Saudi Arabia, Sri
Lanka, Indonesia, Vietnam, and the United
States.
 Impact of Pandemic On OYO Rooms

• Due to the Covid-19 pandemic, the world’s economy was shut down almost
overnight (UNWTO, 2020).
• The pandemic has confronted the hotel industry with an unprecedented
challenge.
• Strategies to flatten the COVID-19 curve such as community lockdowns, social
distancing, stay-at-home orders, travel and mobility restrictions have resulted
in temporary closure of many hotel businesses and significantly decreased the
demand for businesses that were allowed to continue to operate.
• Almost all restaurants and hotels were asked to limit their operations.
• Restrictions placed on travel and stay-at-home orders issued by the authorities
led to sharp decline in hotel occupancies and revenues.
• However, the reopening process has slowly begun.
 Literature Review
• The tourism industry has been identified as of key economic sector that faced
more challenges due to the COVID-19.
• The study argues that the tourism sector plays a prominent role in the
economic growth of a country and further illustrated that the COVID-19
pandemic affected the tourism sector ultimately leading to risks in the
economic growth of a nation.
• Hotels around the world face cancellations of bookings due to the pandemic
situation.
• Thus the Hotel industry lost US$ 150 billion mostly affecting the employees in
the industry
• Thus the impact of the COVID-19 outbreak on the hospitality industry can be
evaluated using room booking cancellations and the status of hotel industry
workers.
• The hotel industry in all world regions recorded a massive drop in the global
revenue per available room, e.g. Asia (-67.8%) and Europe (-61.7%).
• Also, the global occupancies in countries decreased significantly in March
2020, from 20% to over 70% worldwide (UNWTO, 2020).
• The COVID-19 pandemic is the most severe virus outbreak which profoundly
influences the world economy compared to the previous outbreaks.
• The UNWTO data further illustrated that 850 million to 1.1 billion fewer
international tourist arrivals with a loss of export revenues from tourism 910
billion US $ to 1.2 trillion US $ in 2020 due to the coronavirus pandemic
worldwide.
• It also enhanced that 100 to 120 million direct tourism jobs are at risk.
• The above findings revealed a negative relationship between the COVID-19
outbreak and the tourism sector.
 Recovery
• The COVID-19 pandemic will mean holiday-goers will shy away from larger
hotels for the foreseeable future in favor of boutiques and home rentals.
• The anticipation within the hospitality industry is that the coronavirus outbreak
will fundamentally change the nature of travel.
• Small hotels are going to be in vogue.
• Small is going to be the new big where people will rethink a lot about going back
to a 1,000-room hotel versus going to a 40-room hotel.
• The hospitality industry has been one of the most adversely affected by the
coronavirus health crisis and Oyo has cut thousands of jobs at the height of the
pandemic.
• According to OYO in the last four, five months the company has seen some
incremental recovery, especially in geographies such as Europe and the United
States.
• In the United States where Oyo customers are primarily truckers,
pharmaceutical reps and so-called essential workers the company’s revenue
per available room is around 92% of pre-coronavirus levels and OYO has seen
record sales.
• One of India’s largest start-ups, Oyo was last valued at $10 billion in its most
recent private fundraising round in December.
• The company has upwards of $1 billion in cash in the bank and COVID-19 had
not had an impact on any potential plans for an initial public offering (IPO).
 Conclusion
• The COVID-19 pandemic has dramatically changed the hospitality industry,
and understanding its consequences is essential for its survival.
• The adverse impacts of the COVID-19 pandemic have been felt across
countries on a large scale shaking political systems and responses.
• The pandemics effects on travel adversely affected tourism and subsequently
the entire hospitality industry.
• Mixed political responses in different countries have added to the hardships
faced by the hospitality industry, communities and individuals.
• Adversity in the industry has affected peoples organizational perceptions and
reverberated into their individual lives.
THANK YOU.