COVID-19 pandemic has caused a crisis in the business world all over the world. According to reports, Airy, an Indonesian budget hotel startup, will stop its operations by the end of this month amid the COVID-19 pandemic.
Airy said that the decision to stop operations is caused by a “significant technical decline and reduction in human resources.” So, the startup will no longer provide its services to all partners as from May 31, 2020.
Airy was founded in 2015, and since then, it has created a network of nearly 2,000 properties which have a room capacity of 30,000 units.
Louis Alfonso, Airy’s CEO admitted that the occupancy of Airy, especially in popular tourist destinations, e.g. Bali, had declined, although the company was still positive about the sustainability of its business despite the shutdown.
Alfonso said the Airy was using the quiet time to better their quality and services. However, shortly after the interview, Airy reportedly laid off 70% of its staff.
The COVID-19 pandemic has and is severely hitting on the hospitality and tourism industry all over the world, including Indonesia. The Indonesian Hotel and Restaurant had over 1,600 hotels, but now it has temporarily closed down due to the pandemic.
Considering the significant decrease in occupancy rates, most hotels can’t cover operational costs, so they decided to halt operations and send employees on unpaid leave. The Indonesian tourism industry stands to lose around US$6 billion (IDR 90 trillion) between January and April, the association revealed.