Indian hospitality startup Oyo’s founder and CEO Ritesh Agarwal grabbed an opportunity to share his grand expansion plans in America with United States (US) President Donald Trump, who was on a two-day India visit earlier this week.
Agarwal told Trump that his “young startup” has invested in excess of USD 300 million in the US in the past year and would invest another two billion dollars in the US, according to the transcript released by the White House.
“In the last eight months, every day, we’ve opened one hotel in the United States. We now manage over 330 hotels. We invested over USD 300 million in the US,” Agarwal told Trump. “But over a couple of years going forward, we expect to invest another USD two billion in the United States. We brought 2,000 to 3,000 jobs.”
The 26-year-old founder met Trump on Tuesday afternoon in New Delhi, along with the delegation of Indian conglomerate heads including Reliance chairman Mukesh Ambani, Mahindra Group chairman Anand Mahindra, Tata Group’s chairman emeritus Ratan Tata, and chairman of Aditya Birla Group Kumar Mangalam Birla, among others. In fact, Agarwal was the only Indian startup founder to be invited for the meet-up at the Roosevelt House, the official residence of the US Ambassador in New Delhi.
Oyo entered the US market in February 2019 and now claims to manage over 330 hotels in the country. Globally, the SoftBank-backed company is present in over 80 cities with 40,000 properties in its portfolio. India remains the largest market for Gurugram-based startup with about 10,000 properties.
Agarwal told Trump, that the company is signing a pledge with his daughter and senior advisor Ivanka Trump “that will bring hundreds of thousands of more jobs to people across Texas, Louisiana, North Dakota, and so on.”
“That’s fantastic,” Trump told Agarwal. “I actually know of your company. Not just a small company, by the way. Good job,” he said.
This comes as Oyo struggles to restructure and realign its business globally to focus on profitability and not just high-paced growth. Last month, Oyo laid off around one-third of its staff or about 360 employees in the US, barely a couple of weeks after it let go of thousands of employees across India and China.
In an email to its American team on January 29, Oyo Chief Operating Officer Abhinav Sinha said the company’s new mantra is going to be “sustainable growth and profitability,” which will “help the company embark on the next phase.”
Agarwal told American travel research media Skift late last month that after restructuring, he feels, “it’s (time to) put your head down and execute.”
“At the same time, any of the restructuring that’s happened, we’ve tried to be very, very competitive in terms of making sure we do it the right way, ensure that there is more severance than what is required as per contracts to make sure people have the time,” he said.
Oyo, which became a decacorn in July 2019, recently posted an annual loss of USD 335 million for the fiscal year (FY) 2018–19, more than six times as compared to a net loss of USD 52 million for FY 2017–18.
In a subsequent interview with Skift, when asked about challenges the company is facing in the US market such as hoteliers’ complaints about technology not meeting their expectations, changing minimum guarantee amount, and dynamic pricing depending on demand and other factors, Agarwal said: “Sure, I think one of the things I have said multiple times is that we don’t claim to be — and we are not — a perfect company.”