Skift Travel News Blog

Short stories and posts about the daily news happenings around the travel industry.

Hotels

Oyo Hits Reorg Button: Lays Off 600 Employees Across Tech and Product

3 days ago

Oyo, in preparation for its upcoming IPO in 2023, is doing a major reorg of its organizational structure and cost base. It has announced it is letting go of 600 employees out of a total of about 3700, mostly in its product and tech teams. From the company:

“Oyo is downsizing its product and engineering, corporate headquarters and the Oyo vacation homes teams, while it adds people to the partner relationship management and the business development teams. Oyo will downsize 10% of its 3700-employee base, which includes fresh hiring of 250 members and letting go of 600 employees…The downsizing in tech is also happening in teams which were developing pilots and proof of concepts such as in-app gaming, social content curation and patron-facilitated content. Additionally, members of projects which have now been successfully developed and deployed such as ‘Partner SaaS’ are being either let go or are being redeployed in core product & tech areas such as AI-driven pricing, ordering and payments.”

Exterior of an Oyo Hotel in London
Exterior of the Oyo Sino Hotel in the Shepherds Bush neighborhood of London.

OYO, as a part of its integration of various functions of its European vacation homes business progresses, is downsizing in some parts of the business to increase efficiency and harness synergies, the statement added. The startup has also reassessed its corporate headquarter base and is merging roles and flattening team structures.

Tags: india, ipo, layoffs, oyo

Airlines

Surf Air Mobility Drops SPAC, Plans Direct IPO

2 weeks ago

Surf Air Mobility plans to list directly on public markets in the U.S. after ending a planned $1.4 billion special purpose acquisition company, or SPAC, listing.

The California-based aviation company still plans to merge with regional airline Southern Airways Express as part of an initial public officer (IPO), Southern CEO Stan Little confirmed. Surf Air Mobility did not say when it planned to list but has filed a confidential registration statement, or S-1, with the Securities and Exchange Commission.

Surf Air and Southern plan to use their merger to accelerate the introduction of hybrid-electric passenger aircraft. Little has previously said that the combination would provide the capital it needs to take delivery of 100 Cessna Caravans from manufacturer Textron, and convert them to hybrid-electric propulsion beginning in the 2024-25 timeframe.

In May, Surf Air Mobility unveiled plans to list via a $1.4 billion SPAC deal with blank-check company Tuscan Holdings. The two companies mutually terminated that agreement on November 14, with Surf granting Tuscan 600,000 shares plus a termination payment of either 35,000 more shares or $700,000 in cash. Tuscan will liquidate following the end of the merger agreement.

(Surf Air Mobility)

Online Travel

SoftBank Slashed Oyo Valuation 20 Percent

2 months ago

SoftBank Group has reportedly cut the valuation of Indian hotel-booking platform Oyo by more than 20 percent, Bloomberg reported on Thursday quoting people familiar with the matter.

According to the report, the Japanese investor, who owns 45 percent of Oyo, cut its estimated value for initial public offering-bound Oyo to $2.7 billion in the June quarter from an earlier $3.4 billion. In 2019, Oyo had been valued at $10 billion.

The $2.7 billion valuation is lower than the $3.23 billion that Oyo has been able to raise through primary and secondary equity and debt funding rounds from investors. 

Calling the valuation markdown a speculation and “patently incorrect,” Oyo said that having clocked $1 million in earnings before interest, taxes, depreciation, and amortization in its fiscal 2023 first quarter, there is no rational basis for a markdown.

“A 41 percent gross profit margin and a 45 percent increase in gross booking value per hotel per month compared to the last financial year are dramatically improved results and the strong performance trajectory is expected to continue,” Oyo said in a statement.

Earlier this week, Oyo updated its initial public offerings application to the Indian regulatory body — Securities and Exchange Board of India (SEBI). The company originally planned to raise around $1.16 billion through the initial public offering, seeking a valuation of around $12 billion.

Oyo said that SEBI has given the company permission to file updated financials till the September 2022 quarter and Oyo would initiate the approval process post the filing of its audited numbers. “We have not decided the exact timing for the IPO and the IPO valuation is also highly speculative,” Oyo added.

Airlines

Indian Airport Lounge Aggregator DreamFolks Hopes to Open IPO on August 24

4 months ago

India-based airport lounge services aggregator, DreamFolks Services, will be launching its initial public offering in India on August 24. 

DreamFolks Services, through its asset-light business model, integrates global card players, credit card and debit card issuers with airlines and various airport lounge operators. The company also manages loyalty programmes for airlines.

Starting out as an agrregator of airport lounges, DreamFolks now calls itself “a provider of end-to-end technological solutions for building and delivering services that improve the airport experience.”

The initial public offering will open for subscription on August 24 and close on August 26.

The initial public offering is entirely an offer for sale through which the company’s promoters — Liberatha Peter Kallat, Dinesh Nagpal, and Mukesh Yadav — will offload 17 million shares, which constitutes around 33 percent of the post-offer paid-up equity share capital of the company, according to a PTI report.

With the Indian lounge market set for a massive boost, DreamFolks’ decision to go public is said to be rightly timed.

The number of airport lounges in India is expected to increase to 70-90 by 2025 and 150-160 by 2030, as per estimates based on a Frost & Sullivan research. Currently, India has around 54 airport lounges, with 31 percent of the lounges concentrated in the three key metropolitan airports of New Delhi, Chennai and Mumbai.

The total number of operational airports is expected to reach 295 by 2040 with industry revenues expected to grow to $28.6 billion by 2040.

DreamFolks can also take heart from the fact that the non-aeronautical earnings per passenger went up from around $2 in the financial year of 2017 to $4.2 in the financial year of 2021, indicating that passengers are willing to spend more.

The aviation sector has been contributing roughly 3.5 percent to India’s gross domestic product.

Short-Term Rentals

Short-Term Rental Firm CorpHousing Group Is Slated to Do an IPO Friday

4 months ago

CorpHousing Group, which provides short-term rentals under the SoBeNY consumer brand, was slated to see its shares begin trading Friday on the Nasdaq Capital Market.

vacasa multifamily building short-term apartment rental
A multifamily building. Source: Vacasa

The company announced that it hoped to generate $13.5 million in gross proceeds as it stock starts trading under the symbol CHG. The Nasdaq Capital Market is geared for emerging companies with smaller market caps.

The initial public offering would be for more than 3.3 million shares at $4 per share, the company said.

CorpHousing Group offers consumers short-term rentals of single and multifamily units, including furnished apartments.

“Our acquisition initiatives also include leasing portfolios of unreserved rooms at hotels or leasing closed hotels and reopening them under our brands, including SoBeNY,” the company said in its prospectus.

It currently has rentals in Denver; Los Angeles; Miami; Miami Beach; Seattle; Washington, D.C.; Boston and New York, among other locations.

Business Travel

American Express Global Business Travel To Debut on Tuesday — Interesting Factoids

6 months ago

It’s a holiday weekend in the U.S. so what better time to break up the monotony of barbecues and beach, and burrow into a Securities and Exchange Commission filing about the pending SPAC debut Tuesday of American Express Global Business Travel.

Among the takeaways:

  • The merger of Apollo Strategic Growth Capital and Amex GBT will see Amex GBT’s existing investors, including American Express, Certares, and Expedia Group, among others, controlling 74 percent of the voting power. They’ll have the power to make all of the big decisions, including board of director composition.
  • Global Business Travel Group, as the company will be formally called, will be considered to be controlled by American Express Co., and will be regulated by the U.S. Federal Reserve. As Skift previously reported, Global Business Travel Group can continue doing business as American Express Global Business Travel because of an 11-year trademark pact.
  • Only 15 percent of the company’s stock is expected to be owned by public shareholders.
  • Egencia, which Amex GBT acquired from Expedia Group in November 2021, did $8.4 billion in transactions in pre-pandemic 2019. Expedia Group traditionally disclosed revenue for its corporate segment, but not total transaction value for Egencia. That $8.4 billion would have amounted to roughly 8 percent of Expedia Group’s gross bookings that year.
  • The Egencia business was therefore a significant volumes chunk of Expedia Group, which sold Egencia during a huge business travel downturn in a drive to simplify Expedia’s overall operation. At any rate, Expedia Group got a 13 percent stake in Amex GBT because of the deal.
  • Ovation Travel, which Amex GBT acquired in January 2021, was tiny compared with Egencia in total transaction value, $1.2 billion for Ovation versus $8.4 billion for Egencia.
  • Amex GBT CEO Paul Abbott had 2021 total compensation of $18.4 million compared with $5 million a year earlier.

Tuesday’s stock market coming out party for Amex GBT, trading under the stock symbol GBTG, should be an interesting one to watch in terms of investor confidence in the future of managed business travel.

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