Indonesia’s Airy Rooms, a Traveloka-affiliated budget hotel startup, has announced that it will cease its operations permanently after mounting pressure in the wake of COVID-19 made the business unsustainable.
“Airy’s management has considered many factors, including market conditions that almost collapsed due to the COVID-19 pandemic, as well as the severe economic challenge. We are sorry for any inconvenience caused,” Airy CEO Louis Alfonso Kodoatie said in a statement.
DealStreetAsia broke the news of Airy’s shutdown last week.
The startup said the COVID-19 pandemic has disrupted the tourism industry, profoundly affecting Airy’s business as one of the players in this sector. It caused a significant decrease in sales as well as a spike in refund requests from users, ultimately resulting in substantial business losses.
“The company has looked at various angles to ensure the business works during this pandemic. However, the volatile nature of the COVID-19 pandemic forces the management team to take decisive steps and make incredibly hard decisions,” said Kodoatie.
Airy says its utmost priority at this moment is to ensure a smooth refund process to all its impacted customers and the termination process with its partners.
Airy’s affiliation with Traveloka dates back to 2015, the year the budget hotel startup was founded.
According to numerous industry sources, Airy Rooms was incubated at Traveloka, before it was spun off to run its own course. However, in an interview with us last year, the company described itself as a “strategic affiliate partner” of Traveloka, with an “independence to build its own organization, direction and products.”
Airy becomes the second Indonesian startup to shutter its operations after STOQO, a marketplace for F&B businesses, gave up the struggle to keep its lights on.