Bengaluru Hotel Association Accuses OYO Of ‘Unfair Business Practices’

Bengaluru-based Bruhat Bangalore Hotels Association has reportedly contacted the Bengaluru police commissioner to conduct an investigation against Indian hospitality unicorn OYO. 

The Bruhat Bangalore Hotels Association reportedly said in its letter to the commissioner, “owing to the unfair business practices of OYO receivables and losses to hoteliers in Karnataka amounts to hundreds of crores.”

“OYO has been making wilful misuse of its dominant position and their technology to deliberately falsify booking data and cheating the hoteliers by modifying data and withholding substantial amounts,” he added. 

This development came on the heels of a police complaint filed by another Bengaluru hotelier Natarajan V R S, who alleged the OYO’s founder Ritesh Agarwal and two other company representatives of cheating and criminal breach of trust. 

An OYO spokesperson denied the allegation and earlier told Inc42, “We strongly refute the claims made in the complaint that has been wrongfully filed against our Founder and two other office bearers, basis false claims and exaggeration on a regular commercial dispute.”

Hotel Owners Vs OYO

Bengaluru is not the only place where hotel owners have questioned OYO’s business practises. Last month, Inc42 reported that independent protests by small hotel owners are being carried out in multiple Indian cities including Nashik, Pune, Kota, Manali, Jaipur, Ahmedabad and Delhi. 

Hoteliers claim that the hospitality unicorn has been cheating them of their promised returns and minimum guarantees by levying a slew of charges, often without informing them. Many of these charges are not specified in the contract between the owner and OYO, hotel owners that Inc42 spoke to, alleged. 

However, OYO has strongly denied these statements and said that all hotel owners associated with OYO are informed well in advance and at regular intervals about the charges, about its contentious 3C programme — which is used to determine penalties and rewards — and how hotels can avoid the penalties. The company also said that while the company deals with hotel owners on a one-on-one basis, it does not make any deals with hotel associations and neither does it negotiate terms for hotels as a group.

Another prominent allegation made by the hotel owners against OYO is that the company has been misusing its dominant position in the market. However, OYO recently told the Competition Commission of India (CCI) that it is not a dominant player in any relevant market in a case over alleged misuse of dominant position in the market. The CCI agreed with OYO’s contention in its conclusion.