OYO's Ritesh on budget expectations, Airbnb IPO, and rise of domestic travel
A little over a year after uninvited guest coronavirus unleashed chaos across the global travel and tourism sector, Ritesh Agarwal, Founder and CEO of OYO Hotels and Homes, is bullish - he even has a recovery blueprint ready for the hospitality sector.
In a keynote session chaired by YourStory's Founder and CEO, Shradha Sharma, at Resurgence TiEcon Delhi-NCR 2021, Ritesh spoke about how domestic travel and home stays are going to be the key travel trends in 2021, and 'dekho apna desh' will be the key theme in the hospitality and travel sector.
Ritesh said he expects the government to consider small businesses in the space in the upcoming Budget 2021.
"Reforms is the one big word that every entrepreneur, every operator in this country is expecting. Specifically, from a travel and tourism fraternity perspective, the most impacted as well as the most to be able to recover quickly are the small businesses in this segment, and hence it's crucial for the small businesses to get any support. A lot of support has already come under the SME with various support programs, and we hope for more," he says.
He added that there should be further investments on 'dekho apna desh' because tourism within the country will rapidly increase. And for startups, it would be encouraging domestic capital, said Ritesh.
Speaking about budget expectations with Shradha, Ritesh said there should be tax relaxations on Employee Stock Option Plans (ESOPs). "We have a lot of stock option holders in our company who will hopefully be very wealthy, and hence I would like to make sure that they get taxed only then, and not before," said Ritesh.
About the crisis that the hospitality and tourism industry went through during the pandemic, Ritesh said that people underestimated the impact of COVID-19 in the short term, and overestimated the long term impact. He said OYO is seeing recovery, with the company's Gross Margin Dollars returning to 85 percent of the pre-COVID level.
Takeaways from Airbnb IPO
Besides, the fact that the industry is improving can also be gauged from the recent Airbnb IPO (also an investor in OYO), an outstanding example of an industry disrupter, as consumers are seeking alternatives to traditional large hotels. During the virtual chat with Shradha, Ritesh said he has three key takeaways from the Airbnb IPO. First, the market is willing to take a long-term view rather than a short-term view for one or two quarters. Second, markets are enthused about businesses where the brands are strong, "where customers wake up and say that this brand is a choice versus going on a search engine and finding that place," said Ritesh. And third, he added that good companies that are battling right now because of the pandemic need not be worried because the markets are a reflection of the future, and not a reflection of just the present.
However, Ritesh also said that while the industry and the company is recovering, he likes to be cautious, and, "put our heads down and focus on providing the best services for our hotel owners and customers."