Indonesia budget hotel startup surrenders to virus crisis

Airy Rooms, a budget hotel startup in Indonesia, announced it will permanently cease its operations by the end of this month, becoming the first major victim of the evaporated demand for hotel rooms caused by the coronavirus crisis in the country.

Founded in 2015, Airy built a network of 2,000 properties with more than 30,000 rooms and was also a strategic partner of Indonesian travel unicorn Traveloka. However, on May 7 the company said it was terminating its agreements with all hotel partners, following its decision to stop its operational activities permanently as a result of the economic disruption of the tourism sector by Covid-19 regionally and globally.

“We have made our best efforts to overcome the impact of this disaster. However, given a significant technical decline and a reduction in human resources that we have at the moment, we have decided to stop our business activities in a permanent manner,” the company said in an email to hotel partners.

“For this reason, after May 31, 2020, we cannot provide services anymore to all our partners,” Airy added. The company already laid off 70 per cent of its workforce in April.

Second casualty in Indonesia’s startup scene

Airy’s shutdown follows that of local food and beverage logistics startup Stoqo, which is seen as the first tech startup casualty of the Covid-19 crisis in Indonesia.

Airy is not the only budget hotel startup with coronavirus-related troubles. India’s SoftBank-backed Oyo, which is active across Southeast Asia, saw a 50 to 60-per cent drop in revenue and occupancies, forcing the company to implement pay cuts and furlough its employees. Singapore-based budget hotel startup RedDoorz also offered temporary furloughs to its staff and cut around ten percent of its total workforce.

Faced with the same situation, Indonesia’s online travel company Traveloka, too, has laid off hundreds of a total of over 1,200 employees in an attempt to stay financially afloat amid the virus crisis.

Airy Rooms, a budget hotel startup in Indonesia, announced it will permanently cease its operations by the end of this month, becoming the first major victim of the evaporated demand for hotel rooms caused by the coronavirus crisis in the country. Founded in 2015, Airy built a network of 2,000 properties with more than 30,000 rooms and was also a strategic partner of Indonesian travel unicorn Traveloka. However, on May 7 the company said it was terminating its agreements with all hotel partners, following its decision to stop its operational activities permanently as a result of the economic disruption of...

Airy Rooms, a budget hotel startup in Indonesia, announced it will permanently cease its operations by the end of this month, becoming the first major victim of the evaporated demand for hotel rooms caused by the coronavirus crisis in the country.

Founded in 2015, Airy built a network of 2,000 properties with more than 30,000 rooms and was also a strategic partner of Indonesian travel unicorn Traveloka. However, on May 7 the company said it was terminating its agreements with all hotel partners, following its decision to stop its operational activities permanently as a result of the economic disruption of the tourism sector by Covid-19 regionally and globally.

“We have made our best efforts to overcome the impact of this disaster. However, given a significant technical decline and a reduction in human resources that we have at the moment, we have decided to stop our business activities in a permanent manner,” the company said in an email to hotel partners.

“For this reason, after May 31, 2020, we cannot provide services anymore to all our partners,” Airy added. The company already laid off 70 per cent of its workforce in April.

Second casualty in Indonesia’s startup scene

Airy’s shutdown follows that of local food and beverage logistics startup Stoqo, which is seen as the first tech startup casualty of the Covid-19 crisis in Indonesia.

Airy is not the only budget hotel startup with coronavirus-related troubles. India’s SoftBank-backed Oyo, which is active across Southeast Asia, saw a 50 to 60-per cent drop in revenue and occupancies, forcing the company to implement pay cuts and furlough its employees. Singapore-based budget hotel startup RedDoorz also offered temporary furloughs to its staff and cut around ten percent of its total workforce.

Faced with the same situation, Indonesia’s online travel company Traveloka, too, has laid off hundreds of a total of over 1,200 employees in an attempt to stay financially afloat amid the virus crisis.

NO COMMENTS

Leave a Reply