Airy, the Indonesian budget hotel chain, has confirmed that it will shut down and terminate partnerships, as well as purchasing and booking, by May 31, as KrASIA reported earlier. CEO Louis Alfonso Kodoatie said that the decision to cease operations had to be taken and that it was a tough one.
“Airy’s management has considered many factors, including market conditions that almost collapsed due to the COVID-19 pandemic, as well as the severe economic challenge. We are sorry for any inconvenience caused,” Kodoatie said in his press statement.
A spokesperson of the company also confirmed to KrASIA that all employees will be released. “We have the highest appreciation for their contribution and we apologize for the inconvenience. Those affected will get their rights in accordance with labor laws,” the spokesperson said.
COVID-19 has become a major industry-wide problem, disrupting tourism and profoundly affecting Airy’s business. In the past months, Airy has seen a significant decrease in sales as well as a considerable amount of refund requests submitted by its users. This caused substantial losses.
“The company has looked at various angles to ensure the business works during this pandemic. However, the volatile nature of the COVID-19 pandemic forces the management team to take decisive steps and make incredibly hard decisions,” said Kodoatie.
Refunds for bookings after May
At the moment, the company is prioritizing the refund process for impacted customers and termination process with partners. Refunds will be applicable for customers who have purchased or booked accommodation and flight tickets for May 31 or after.
Airy said it will also withdraw from programs it is currently undertaking with the Indonesian government.
Founded in 2015, the startup created a network of around 2,000 properties, with a total room capacity of 30,000 units. It was backed by East Ventures and Indonesia’s unicorn Traveloka.