Less than six months after they struck a partnership in the area, the Latin American unit of Indian hotel start-up Oyo Corp ended its joint venture with the SoftBank Latin America Fund, both companies said on Thursday.
Oyo’s company in Latin America, known as Oyo Latam, on Wednesday said it was switching to a digital-only model, and that the changes would entail laying off nearly its entire workforce.
The SoftBank Group, part of its more than $1 billion investment in the parent company, has poured $75 million into Oyo in Latin America.
While hotels will still operate under the Oyo brand in the region, operations will now be controlled directly from Oyo’s home base in India, a spokeswoman for Oyo Latam told Reuters.
“The Latin American joint venture (with SoftBank) has ceased to exist,” she said, adding that it did not mean that Oyo was absolutely shut down in the area. “It was another adaptation due to the pandemic,” she said.
SoftBank, based in Japan, added that the decision was taken jointly with Oyo because of the challenges faced by the coronavirus pandemic and that it will no longer invest in the business in the region.
In September, Reuters claimed 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 pummelling the tourism sector, Oyo has suffered through its markets worldwide and has dramatically scaled back its workforce.