Indonesian Hospitality Startup Airy To Permanently Shut Down Amid Pandemic

Airy, an aggregator of budget hotels in Indonesia, said it will permanently cease its operations by the end of this month.

In an email to its property partners, a copy of which was seen by Tech in Asia, Airy said it is terminating its agreement with its partners, following the company’s decision to stop its operational activities permanently.

Airy explained that the Covid-19 pandemic has threatened almost all business sectors, especially the tourism space.

“We have made our best efforts to overcome the impact of this [international] 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 the email.

“For this reason, after May 31, 2020, we cannot provide services [anymore] to all our partners,” Airy added.

Tech in Asia reached out to Airy for comment, but a spokesperson for the company was unable to provide more information on the matter.

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

In an interview with Tech in Asia in March, Airy CEO Louis Alfonso Kodoatie said that the company was pivoting towards profitability in an effort to mitigate the impact of the pandemic, which had already affected Airy’s occupancy rate.

“We are optimistic that the pandemic will be resolved soon and the travel industry can recover,” Kodoatie said at the time. “With the right technology and service quality, we are sure that Airy can bounce back faster and have our business recovered as before.”

However, last month, it was reported that the startup laid off about 70% of its staff.

Founded in 2015, Airy has a network of 2,000 properties with more than 30,000 rooms. It is also a strategic partner of Indonesian travel unicorn Traveloka.

The travel and hospitality industries have been struggling to survive since the Covid-19 pandemic prompted governments to issue travel bans worldwide.

SoftBank-backed Oyo saw a 50% to 60% 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 laid off less than 10% of its total workforce.

 

Reference: Tech In Asia