OYO Hotels & Homes, which had sent a section of its India employees on leave with limited benefits, has decided to extend the same by another six months ending February 28, 2021.
The impacted staff have also been given the option to opt for a voluntary separation programme (VSP).
The leave with limited benefits period had been initially implemented for a four-month tenure ending August 31. The decision comes as a continued surge in infections dampens prospects of a swift revival in business.
In a blog published on Friday, Rohit Kapoor, CEO, India and South Asia, said hotels are reopening in phases and the recovery is taking much longer than expected. “Despite our best efforts, we don’t quite know when our occupancies and revenues will recover to pre-Covid levels. In such a situation, we do not foresee more roles opening up anytime soon,” Kapoor said.
In an interview with FE last month, Kapoor had said OYO has managed to reach 30% of the pre-Covid occupancy levels in India with bookings led by millennials and small businesses.
A nationwide lockdown initially imposed for a 21-day period got extended by over two months and the economy only opened up in phases starting early June. The hospitality sector, primarily dependent on travel and tourism has been severely impacted. A CARE Ratings report released in July said the hotel industry may take anywhere around six to eight quarters to reach pre-Covid level occupancy rates.
“…nobody had the idea that the lockdown will be extended four times until June 30 in varying degrees, leaving a long-lasting impact on the business and a severe dent on our revenues,” Kapoor said.
The Gurgaon-based company’s consolidated losses increased to $335 million for the year ended March 2019 from $52 million in FY18, as expansion into international markets, including China, entailed heavy costs.
OYO said the employees opting for VSP will receive financial assistance, relaxation on ESOP vesting besides being eligible for health coverage, parental insurance and other company benefits. The firm has also partnered with ABC Consultants to offer career transition support to such employees. OYO will publish a list of all open jobs till December 2021 and make it available to those who opt for VSP to apply.
Employees who choose to go for an extended leave with limited benefits will be given financial assistance in the form of school education and vaccination allowance apart from health and wellness coverage.
OYO said it called back some impacted colleagues in different teams and geographies, as limited opportunities opened up.