SUMMARY
FHRAI issued notices to MakeMyTrip and Goibibo earlier this month
FHRAI is looking to approach the CCI and the tourism ministry
MakeMyTrip claims to have received more than 10K supporting emails from hotels
MakeMyTrip (MMT) group chief executive Deep Kalra reportedly said the Federation of Hotel and Restaurant Association of India (FHRAI) has no locus standi to determine commercial agreements between MMT and the establishments on its platform.
He also said that he had received more than 10K supporting emails from hotels that are on both MakeMyTrip and Goibibo platforms as well as from city chapters, stating that they have no pending issues.
The Federation of Hotel and Restaurant Associations of India (FHRAI) has issued notices to online travel aggregators (OTA) MakeMyTrip and Goibibo earlier this month, alleging that business practices followed by OTAs were exploitative, unethical, and divisive, and led to predatory pricing and other market distortions.
The federation has also forewarned a nationwide protest against the OTA entities if the discussions are not fruitful. It is looking to take up the matter with the Competition Commission of India and the tourism ministry.
“Meetings with the Competition Commission of India and the tourism ministry are on the anvil. They (platforms) have assumed a very dominant position and based on that, they are arm-twisting hoteliers. They are doing predatory discounting without the hoteliers’ consent which is creating an unhealthy business environment,” said Pradeep Shetty, honorary joint secretary, FHRAI in a media statement.
However, according to Kalra, MakeMyTrip 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 with these establishments. Reportedly, the company has met the FHRAI officials and hopes they will see reason.
Prior to this, the Hotel and Restaurant Association of Gujarat and other states have also decided to boycott certain online booking portals, citing biased and unilateral business decisions taken by them including MakeMyTrip, Goibibo, RedBus and OYO.
FHRAI has also alleged SoftBank Vision Fund-backed OYO of large-scale breach of contract and predatory pricing. OYO, has denied these allegations stating that it is aware of the recommendations made by certain bodies and is actively engaging with the asset owners, franchisees and lessors associated with OYO Hotels, on a one-to-one basis.
An OYO spokesperson also 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%.
Together MakeMyTrip and Goibibo hold more than 70% market share in the online travel space. Others like Yatra, OYO hold 10% each. The Indian online travel segment is expected to cross $13.5 Bn by 2021, accounting for about 43% of the country’s total travel segment, according to a report by Praxis Global earlier this year.
[The development was reported by ET]
