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After India, OYO Faces Heat From US Hotel Partners Over Alleged Unpaid Dues

After India, OYO Faces Heat From US Hotel Partners Over Alleged Unpaid Dues

OYO’s property management system blamed for being riddled with bugs and crashing frequently

Some hotels allege OYO customers pose a criminal threat

Will OYO be able to act in time to save its US business after similar trouble in India?

After troubles with hotel partners in India, it’s the turn of OYO partners in the US to lay down allegations of misconduct and distress because of the hospitality company’s policies. As highlighted in an in-depth investigation by Skift, several OYO hotel partners have reportedly raised issues ranging from poor software, loss of revenue as well as criminal activities within rooms that are managed by OYO.

The report states that while OYO has acknowledged some of the issues, the company has refused to comment on many of the allegations made by the hotel partners.

“We have taken cognizance of the feedback and are addressing asset owner concerns and issues on a war footing,” an Oyo spokesperson was quoted as saying. And the company’s response went on to add that many of these problems have already been fixed since the early days.

“Oyo is a high-value-oriented company with world-class institutions as partners, and hence we will take hard decisions against anything that is not remotely right.” – OYO spokesperson

The hotels have also alleged ignored or missing payments, even though they had been promised a certain amount as a guarantee by OYO. Moreover, hotel partners have claimed that they have no rights over the booking or room charge.

Many partners have claimed that due to the low pricing, which is controlled by OYO, the hotels have allegedly attracted “prostitution, druggies and kids looking to party,” according to the Skift report. The OYO spokesperson said that to solve the issue of poor quality of customers, the company is working on a rating system for the customers.

Even though OYO says that it’s using technology to solve the problem of property management for hotels, partners had unsavoury things to say about the system dubbed Oyo OS. “It’s the worst system around. We really don’t have any control of anything,” said the general manager of the Oyo Hotel JFK Airport, who also complained of frequent crashes.

OYO Protests In India

OYO has been mired in protests from hotel partners all across India for similar reasons. While OYO announced funding of $1.5 Bn as a part of its Series J, the discontent among the hotel partners regarding OYO’s services are making the headlines again.

In August 2019, the uproar had officially started once again. Small hotel owners were carrying out protests against OYO in multiple Indian cities such as Nashik, Pune, Kota, Manali, Jaipur, Ahmedabad and Delhi.

Moreover, a Bengaluru hotelier Natarajan V R S in September had accused the OYO’s founder Ritesh Agarwal and two other company representatives of cheating and criminal breach of trust. The same month, Bruhat Bangalore Hotels Association had contacted the Bengaluru police commissioner to conduct an investigation against OYO over “unfair business practices”

Earlier this month, hotel owners in Sikkim took OYO employees hostage for non payment of dues, which had allegedly piled up to over INR 1 Cr.

OYO has claimed that the protests are isolated incidents though there’s clearly some synchronicity between the many protesting groups.

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