OYO Hotels & Homes, the Indian hospitality chain, is backing out of their real estate rental business in Japan.
In February 2019, the company launched housing rental service OYO Life with a lofty goal of disrupting the procedure-heavy process for renting apartments in Japan. Yahoo Japan signed on as a stakeholder. The company aimed to manage 1 million rooms within the next 12 months, according to Bloomberg. One year later, the company had managed to sign up 7,500 rooms. In April 2019, they formed a joint venture with Softbank, launching OYO Hotels Japan.
Their team eventually grew to over 800 staff. By August 2019, the growing pains became apparent and by December, Yahoo Japan sold their one-third stake back to Oyo for the grand sum of 339 Yen after paying 8.3 billion Yen to acquire it months earlier.
In July 2020, as the pandemic took hold, the company merged its short-term residential leasing and hotel business into one shared platform. The number of short-term apartments under management had dropped from a peak of 8,000 to under 500.
The residential leasing side continued to remain unprofitable, causing them to cut their losses this year and shift their focus to the hotel side.
Source: The Nikkei Shimbun, March 17, 2021.
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