Hotels In Sikkim Terminate Contracts With Goibibo-MakeMyTrip

In a growing tussle between hotel associations and online travel aggregators (OTAs) in India, the Sikkim Hotels & Restaurants Association (SHRA) has agreed to not continue conducting business with Goibibo-MakeMyTrip (Go-MMT) until the concerns raised by the association are resolved.

“Effective 16th January, 2019 hotels in the state have indefinitely closed inventory to the OTAs and have decided to not honour any new bookings that might come through. During the meeting, SHRA member hotels have also decided to terminate their contracts with Go-MMT immediately,” the group said in a press release.

In December, Federation of Hotel and Restaurant Associations of India (FHRAI) had issued notices to MakeMyTrip and Goibibo alleging that business practices followed by OTAs were exploitative, unethical, and divisive that led to predatory pricing and the group had threatened a nationwide protest. As of 31st March 2018, the total membership of FHRAI was at 3,728 members

According to Deep Kalra, founder and CEO of  MakeMyTrip, the company deals directly with its partner hotels — standalone or chains — and no association has the right or ability to dictate the commercial terms of its contractual agreements.

“We are in solidarity with the country’s apex hospitality body – Federation of Hotel & Restaurant Associations of India (FHRAI) and also our regional body – Hotel & Restaurant Association of Eastern India (HRAEI) in uniting against the OTAs’ unfair and discriminatory business practices,” SHRA in a statement.

The Sikkim association had apparently written to the OTAs and had even held meeting with them over abolishing coupon code discounting on hotels from OTAs, standardizing commission at 15% and removing the clause of Performance Linked Bonuses (PLBs) without the written consent of hotels, among others issues.

“We haven’t received any reply or response from Go-MMT and so we have decided to take this step,” said Pema Lamta, president, SHRA.

Hotels Not Ok With OTAs

It is just not MMT but the also the likes of hospitality chain OYO. who have faced the brunt of disgruntled hotel operators.

In December, it was reported that the Hotel and Restaurant Association of Gujarat along with associations in Mumbai, Delhi, Mysore, Bengaluru, Kolkata and Hyderabad were banding together and considering legal action against OYO citing inability to compete with the might of the heavily funded OYO.

The hotel associations have claimed that after disrupting the market by providing deep discounts, OYO is not keeping up with the agreements.

An OYO spokesperson had previously told Inc42 that the changes demanded by the hotel owners lobby could end up raising the prices for end customers by as much as 40%.