OYO, RedDoorz vs ZEN and the art of pandemic perseverance

Southeast Asia’s top budget hotel chains are in critical shape after Covid-19 slammed the brakes on their growth. Smaller companies like ZEN Rooms and ZUZU Hospitality, which grew more conservatively, show the way

With occupancy rates and revenues plunging up to 80%, OYO and RedDoorz have laid off and furloughed hundreds of employees

After growing at a breakneck speed and trying to one-up each other, the pandemic has forced both companies to pull back

Smaller players like ZEN Rooms, which diversified its revenue streams, have had to cut down less radically

OYO has ample cash reserves but is unlikely to see the same cheque sizes as before, and might be forced to exit some markets

It’s no vacation for the hospitality industry. Reeling from the Covid-19 pandemic, popular budget hotel chains OYO and RedDoorz have seen occupancy rates and revenues plunge up to 80% in Southeast Asia.

They’ve also been forced to let go and furlough hundreds of people, along with cutting salaries across the board. OYO declined to provide the actual number of affected employees, but said “a handful” were furloughed. RedDoorz told The Ken it has reduced the working hours of some staff, furloughed an undisclosed number, and laid off less than 10% of its workforce.

However, those affected told The Ken the tally is higher:

RedDoorz said the above figures are inaccurate, while OYO said the number of employees they furloughed is significantly less.

AUTHOR

Jum Balea

Jum is a Manila-based reporter for The Ken, where she covers startups and business across Southeast Asia, with a focus on the Philippines. She previously was editor for Tech In Asia, and business editor for Philippine media companies Rappler and ABS-CBN.

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