This is Bloomberg Business Week with Carol Messer and Jason Kelly on Bloomberg Radio. So. Back in December, Bloomberg Business Week reported on how Oyo Hotels had become the world's number two hotel operator by room count and was poised to overtake number one Married International. They've been on quite a tear, but like many in the hospitality industry, they are dealing with the coronavirus pandemic and the impact it's
having on their businesses. Uh. Ritesh ager Wall is CEO of Oyo Hotels and is joining us on the phone from Delhi, India. He is also the founder of Oyo Hotels. Rites. Thank you so much for being with us. UM, give us an update on where you are and the impact that the virus is having on your business. You guys operate around the globe. Yeah, first off, thank you so
much for having me over the Business Week. Uh. This is someone this is a program which I'm a big follower off and I'm so glad to have an opportunity to come speak here. Uh these are of course. Uh, you know, our company is young. We have a five and a half six year old company and in this period of time, we have never seen anything like what the virus has become for the hospitality and the travel industry.
The size of the impact is unprecedented. Um you know, from from not just a company just five and a half six years old, but for a company that would have been probably been around for decades. So from from our perspective, I think we are trying to constantly respond to this situation in the following manner. The first priority for US has been making sure that we serve our customers and our communities were the highest amount of priorities. So we are trying to fight the virus and everywhere
we can, in every part of the world. So whether it is in the United States by means of the First Responders program, whether it is in India by helping in the form of isolation centers or extended hospital, or whether it is in China and near the ten Day Hospital to enable health workers to get good places to live in or in the UK for helping the NHS workers to find them good places sustained. I think we're trying to make sure we do everything possible from cleanliness,
ease of uh space for all of them. But on the other hand, we're also trying to make sure that we have prepared for, uh, you know, all the challenges that our business is going to face in the coming months. It is too early at this point of time. We have on one side a positive story in China, which has started recovering. It's not fully recovered yet, let me clarify, but at six of what it was at the peaks before.
But that said, globally every market we are seeing some of the other kind of impact due to the coronavirus situation, and I believe it's something that's going to continue to impact the hospitality industry for the near future. So well, let me ask you how badly was your China operations, how how hard were they hit um and how will it effect revenues overall? Since I think you've already lost
about five million last fiscal. Sure, I think you know our company lost his last year if you were to compare that to the previous fiscal improved in India but accelerated in China because we had just launched in China last year fiscal, but the COVID situation happening in the
same year was not a good news at all. I think the China occupancy for Oreo dropped quite substantially, So if there was a hundred dollars in revenue, we've typically lost around sixty to sixty five dollars in revenue immediately when the first lockdowns got announced. I think we've been able to recover a little over half of it now, but there is some way to go before we recover the rest of the occupants. So that's how the China
business results have been. That is, in less than two months, the business has been able to discover more than half. But that said, um, it's it's still behind, significantly behind what it was earlier, and I think our genuine hope is we're able to see similar recovery from every other part of the world. But that said, um, we are operators who are you know, who aspire to try and
come out stronger at the other end. At the same time, prepare for making sure that even if this wider situation does last longer, we are enabling our company a chance to be successful in the very long term. But I do, I do, I am curious about what this means that for your plans. I know you guys were looking at becoming the world's largest hotel operator. I mean overtaking Marriott. I know, um, this was certainly you know in the
works prior to the virus. How does the virus, I mean, some of your biggest markets China, the US, and Europe have been hit really hard. So how does this affect your plans to be come number one in terms of hotel operators? Sure? I think at this point of time, our focus is primarily on making sure that we serve our consumers and the health workers and the community around us.
I think, uh, if you're able to do good for the world, I think, um, and for our customers and partners, I have no question in mind that we will get to not just being the leading hotel chain, but much more a company that people are inspired by. But that said, I think what's clear is that we had in the last few months been able to prove that our capabilities are clearly superior for enabling small hotel owners to be successful. So over the next six to eight months, the small
hotel owners are going to is really tough times. The occupancies are going to be low, operating costs will need to be very closely looked at, and a lot of these smallertail owners will need support and education to be able to take advantage of the fantastic um bailout packages
that various countries are trying to help. Our small and medium enterprise it opens over the next eight months, can be partner them and make sure that we can come out stronger by means of making them successful but also having a stronger business in the part of becoming a bigger but at the same time a stronger and he
be a company at the end of this crisis. Well, and I do wonder you know what you're thinking is about it was recovery plan when we get to the other side side of it, because from what I've understand, you've cut a bunch of workers, and you guys have been phasing out, um the guarantees that you give to
the revenue guarantees to some of these hotel operators. Um. So you talk about helping the independent hotel folks, But I do wonder if you anticipate that as a result of this and unforeseen in terms of the virus, that some of those independent hotel operators, because you you won't be giving them the revenue guarantees, that they're going to ultimately probably be hurt in this process. Yeah, that's a very important perspective, I think I would answer that into
different parts. The first one is OIL has continuously focused on making sure that how do we bring more revenue for our partners, and as you have been able to make sure that every year increase the occupancies of ACID owners more than them remaining UM independent or through some of the other arrangements with one of the competitors. I think we've tried to be a leading edge for our partners to make sure that even in these toubtimes we
can be a preferred alternative for them. But that said, you're absolutely right that we have been phasing our guarantees, especially for our new signing and as well as for some of our past active owners. So due to that, there will be definitely some of the challenges from our partners. But I think what we're trying to do in the process is make sure that we continue to engage with our partners, bring them more occupancy, and more importantly so
the partners who are highly affected. We're setting up a global COVID nineteen fund for our asset owners and UM. You know, Bloomberg also recently covered about our process of enabling those in Japan, in Southeast Asia and so and over thecoming days, we plan to bring it worldwide entered no go ahead. Our intent is we are not a perfect company, and they've never said that we are one.
But our hope is how do we constantly improve ourselves to be better than anybody else for our customers and our partners in these really tough times and with the limited resources we have, And that that's the only aspiration that we're taking along without one of the things. And I know when you're in a company like your own, I mean you're thinking about, you know, how this impacts yourself personally, certainly the virus, but of course how it
impacts your workers. Um, you guys have cut about five thousand jobs. I mean, do you anticipate that there will be more job cuts? So, first off, I think the job cuts that are the restructuring that we had announced for in January, which was as a part of our restructuring organization, given three important parameters that we have discussed earlier. But that said, I think at this point of time, the COVID nineteen situation is very very unique. From OILS perspective,
Our principle or the opinion is as under. I think this situation being unprecedented our focus will be that's how can be ensure that we prioritize any impact on the senior executives before any individual job is touched, which means that before anything like that where to be considered, my pay, my executives stay and their executive spray will be the first one to be touched, and I should be at
the pay before I consider any of those discussions. So I think at this point of time, we are still evaluating the broadest challenges and impact of the COVID nineteen situation. To be honest, it has impacted some of our markets, but some of our markets are still not impacted yet, but we do anticipate that they will getting impacted. So once we understand more about the details, we will figure
out what the outcomes are. But what I can assure is that at any point at any of those outcomes, I think the first one to be impacted by a challenge like that would be need and then my executives attached. Almost done. But I just wanted to ask you, I am curious if you're feeling any kind of pressure from
either investors, I mean Soft Bank. They are you're controlling shareholder, the Vision Fund, and they have been under pressure as you know over the past year or so UM specifically because of some of their investments we work and others UM. But there is a lot more emphasis on startups being profitable. Are you feeling pressure UM as a result of that, be it from SoftBank specifically or directly, sure? No. I think the first one I want to classify that OIL
is a board and UH distributed shareholder let company. I think, of course Software Vision Fund is a very valuable shareholder, but they're not be controlling shareholder in a company beyond Software and Whision Fund has toquire capital light speed UM and they just have a shareholders and are capitable and are very thankful to all of them, including Division Fund.
I think our company driven by a very strong group of board members like let's see UH and and a couple of other independent board members, along with our shareholders boardlembers as well. Clearly, I think the world and the high growth companies, even before the COVID nineteen situations, had acknowledged that past to profitability is something that the markets want to see, and I think the COVID nineteen situations will give their advice to the high growth companies even further.
Our company is in a place where, UM, we are uniquely positioned to be able to get there. It don't happen by happenstance. We will need to work hard and make sure that every day we try and do more work to be able to make sure that we emerge a stronger company with long term UM success. But you know, in order to do that still require significant amount of hard work. I'm not pressured but by means of any
of our share owners. UM. But I think as an entrepreneur who wants to do right for his company and his steam members, his customers, and his shareholders, I think I do. I do feel a sense of responsibility and um, you know, duty towards the company that I serve and and I'm I'm fully committed to making sure that I serve it with the best of my understanding. And I am curious too. I mean, you're calling you know, I'm
talking to you from Delhi, UH and I do. We talked earlier on our broadcast about the emerging markets and how they're bracing for the impact of the virus. What can you tell us about what's going on UH India, specifically what you're seeing and and you're concerned about you know the country and what it might face with the virus and certainly the spread of it. Sure I may be psychly biased in that respect, so forgive me for that.
I think from our perspective that a few important views, specifically about India and then more broadly about emerging markets.
I think the first views that I believe the consensus at least what I'm hearing, is that India will emerge stronger economically um at the end of this crisis, especially because uh, this is an economy which uh you know, has not been very significantly hit by the virus so far, high schools to a thousand cases, uh, limited debts and um you know, of course any that is very bad, but relatively smaller in comparison to various other larger countries.
And second, there is relative guidance that has been issued of GDP podcasts. Uh. It's of course a very bad time to be able to sort of say that which countries are doing better, But India probably will be one of the fastest growing economies even in these really tough times. And more than that, I think the Indian Prime ministers taken significant steps to consider lockdown, including body field UM and and multi state body see at a time when
we had a couple of hundreds cases. IM since you're hope is all of these steps should keep our country ahead and enable our economy to prosper, which will definitely means a quarter or two of UM really tough signs and that's something that everybody in the industry will feel and hospitality and travel will see more than most others. But I think, um, and it will require a lot of stuff steps including I think being able to make sure that we are able to constantly navigate the path
of ensuring that these two quarters we get past. That said, I think my belief is at the end of this, uh, we will we will be a stronger economy here in India and emerging markets at large. UM. That's great because I was going to ask you, how do you think the coronavirus pandemic will change the world once we get on the other side side of it, and I am
assuming that would be kind of your answer. Yeah. I think my belief is that one of the things that the virus has proven is that the g DPS or the per capita income uh if not what the virus judges which country it impacts too. Uh So I think it's at the end of the other side. I think it will be imperative for the world to sort of
try and make sure that it is much stronger. My belief is countries, regardless of being emerging economies, are developed, the countries with fundamentals are stronger will end up coming up recovering faster, and countries with fundamentals are weaker, whether they're developed or emerging, will will take longer. Very similar to how it is about for private companies of public companies, high quality companies come back always sooner than other companies.
Our hope is we will be one of those companies who will continue to be what it's fundamentals and and and come out sooner. So I've got to ask you since you said that, I mean, I know one of the things that's been talked about, and I promise this will be our last question. Um, we talked about you know, the ten billion value, ten billion dollar valuation. Do you think you know? I mean, how is that affected by
all of this? Sure? I think, um, you know, first off, I think as operators and entrepreneurs, I think we're focused on building a good business rather than what the valuation is. UM. Every day We're thankfully not a public company, because if we were a public company in today's world where market cars singing as quickly as they would, then I think that would be the only topic we discuss if we care about it. So clearly as a management and as a company, our focus is really a good business and
not the valuation. Um. I think from our perspective, the valuation is a function of what is the quality of the business, what is the stage and how the company that it in value? Which is which is something that is best less two investors to be able to decide um, you know how how they consider energy on valuation. So whenever or considers raising it makes around with capital either privately or if any shares of its gets traded in sequency markets, I think that's probably the time to see
how the valuation getting effected. Alright, Gonna leave it there. Thank you so much. I know we covered a lot and I didn't mean for it to go on this long, but I just since we had you and I really appreciate you getting up we all do, so. Thank you so much. Stay safe and um, I you know, I hope everything goes okay, and let's hope you're out of the situation sooner rather than later at this point, So
do stay safe. Thank you so much. I just wanted to add one more thing, sure, yeah, I just wanted to add that the United States is going through an unprecedented situation. The RUNDO three hundred hotels there for the first responders in the United States. We have brought in a program there first responders, including health workers and various other people who are engaged in the fighting as coronavirus.
OIO has committed to bring freedoom nights for them along with its partners, to ensure that they don't need to worry about going back to their loved ones and being worried about having some issues of the virus back home. They can come back safe, have a good night, get a good shower, and uh, you know, support all of our friends and families in the United States in this in this big fight around coronavirus. I know the Four Seasons in New York has also come up with something similar.
Our beliefs all of us here at hotels can do very limited things given the limited resources we have and more so oil being a startup. But in the in the COVID fight, whether it's a smaller, big company. We are all in it together, and they're very thankful to the people of the United States and the first responders for taking this up so positively so far. I'm so
glad you brought that up. It's something that we actually have mentioned on air already, so UM we commend you for doing that because that certainly has been a helpful thing for those focus or folks, especially in the medical community, who are on the front line of all of this. UM rites, thank you so much. Like I said, I know it's the middle of the night, so thank you again so much for spending time with us and good luck with everything. Ritesh Agrawall, founder and CEO of Oyo Hotels,
on the phone from Delhi, India. Thank you. Ratah