The Latin American unit of Indian hotel company Oyo Corp. terminated its joint venture with the SoftBank Latin America Fund, less than six months after the relationship had been formed in the city, both companies said on Thursday.
Oyo’s Latin American business, known as Oyo Latam, stated on Wednesday that it was switching to a digital-only model, and that changes would require almost all of its workers to be laid off.
SoftBank Group has contributed $75 million to Oyo in Latin America, part of its more than $1 billion investment in the parent firm. While hotels in the area will still run under the Oyo name, operations will now be operated directly from Oyo’s home base in India, Oyo Latam spokeswoman has said.
According to her, the Latin American joint venture (with SoftBank) has ceased to exist. She continued and said that it did not mean that Oyo was absolutely closing down in the area. Apart from this, she said that it was another adaptation due to the pandemic.
SoftBank, headquartered in Japan, added that the decision was taken jointly with Oyo because of the threats faced by the coronavirus pandemic and that it will no longer invest in the business in the region.
In September, Reuters announced that through a joint venture in Latin America to operate around 1,000 hotels, SoftBank was taking a more active role in the virus-hit hospitality start-up.
As the coronavirus outbreak pummeled the tourism sector, Oyo has suffered through its markets worldwide and has dramatically cut down its workforce.