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Pan-India Hotel Lobby Drags OYO To Competition Watchdog Over Broken Promises

Pan-India Hotel Lobby Drags OYO To Competition Watchdog Over Broken Promises

The complaint alleges that the assurances to hotels have not been resolved

The matter has been scheduled for hearing on August 6

The hoteliers group in Bengaluru has asked OYO to take corrective action

The Federation of Hotels and Restaurant Association of India (FHRAI) has reportedly filed a complaint with the Competition Commission of India (CCI) against Gurugram-based hospitality unicorn, OYO. The hotel body has alleged that three months after OYO promised its partners an 18% interest on delayed payments and launched complaint redressal solutions, the issues continue to be unresolved.

Pradeep Shetty, honorary joint secretary at FHRAI said, “No hotel or business wishes to turn down opportunities that may translate into revenues, but the environment created by Oyo has left hoteliers with no choice but to cut ties with it.” The matter has been scheduled for hearing on August 6.

The hotel lobby is yet to respond to Inc42’s queries on the matter.

The hotel owners have reportedly accused OYO of levying new charges on partners over the last two months on an ad hoc basis. A Bengaluru-based hotelier alleged that OYO had assured of no hidden charges, however, the rules have changed nearly every month. The hotelier further alleged that along with convenience fee and charges on walk-ins and online payments, OYO will now charge them extra depending on the guest ratings.

The group has asked OYO to take corrective action as they now plan to organise a bigger protest with around 550 hotels in Bengaluru. Further, FHRAI is now advising its members to legally terminate contracts if they so desire and ensure that travellers do not suffer.

Notably, the protest against OYO now comes after last month, Delhi High Court issued an ex-parte interim injunction order restraining Hotelier Welfare Association from boycotting OYO. The case developed where hotel asset owners from across the country started coming together to voice their concerns against OYO’s unfriendly business practices.

They had been alleging disregard to agreed floor prices, deep discounting practices, non-transparent charges, irrelevant levies in addition to high-handedness and one-sided enforcement of the contract when it comes to deliverables by the hotel asset owner(s).

It issued notice to the associations on the suit and listed the matter for further hearing on August 5.

Prior to this, in December 2018, the Federation of Hotel and Restaurant Associations of India said apart from breach of contract, most of its members have grievances with OYO, regarding endorsement of and hoarding illegal and unlicensed bed and breakfast apartments, flats in residential/commercial buildings, and such other independent structures as hotels.