Tensions between SoftBank-backed Oyo and hoteliers in China were highlighted this week when a dozen operators descended on the Indian-start-up’s Shanghai office to demand compensation for lost income, with some clashing with security staff.
Prompted by its unconventional practice of offering hoteliers guaranteed incomes, irrespective of guest numbers, the disputes point to what investors and former staff say are wider problems with its business model, which is leading to huge losses in China.
Billions of dollars in backing, including from its biggest investor SoftBank, has helped fuel Oyo’s rapid expansion in China. It claims to have signed up 19,000 hotels — with 900,000 rooms — in 338 cities since 2017, making it the biggest hotel chain in the country.