MakeMyTrip-OYO Partnership Raises Concerns Among Independent Hotel Owners

MakeMyTrip’s delisting of budget-focused hotel aggregators Treebo and FabHotels in keeping with its commercial agreement with homegrown hospitality major OYO has raised the hackles of independent hotel owners, who reached out to the company to raise their concerns on the matter.

In a report, ET claimed that a group of hotel owners, some of whom are also a part of the Delhi Hotel and Restaurant Owners Association, met MakeMyTrip officials individually and sought assurances that the arrangement with OYO wouldn’t impact their bookings and revenues on GoIbibo and MakeMyTrip portals.

The Delhi Hotels and Restaurants Owners Association claims to represent 400-500 small and mid-sized budget hotel establishments.

The president of the association, Sandeep Khandelwal, said, “They have given us verbal assurances that there will be no disruptions and OYO will not be favoured over independent hotels. MakeMyTrip has over 40K hotels listed on its platform, a significant portion of which are small independent establishments. The arrangement with OYO should not affect us”

Another independent hotel owner who met MakeMyTrip officials told ET that since relisiting of OYO on the MakeMyTrip platform, the ratings and reviews of OYO’s properties had improved substantially on the platform.

He added, “It is of concern to us, especially when OYO room rates are lower than ours due to their deep pockets, and are then further helped by top ratings.”

However, when Inc42 reached out to MakeMyTrip, the spokesperson refuted the report saying that the company has not held negotiations with any association, but has been in touch with its partner hotels as part of its regular business outreach.

“As part of our regular business, we have frequent direct meetings with our hotel partners. We have had no meeting with any such association, nor have we been approached by one,” the spokesperson added.

These hotel owners have also raised concerns over the commissions the aggregator charged them.

After two years of delisting OYO from its platform, the online travel company recently relisted OYO on its platform along with GoIbibo.

In a media statement, the companies claimed that the partnership would add momentum to India’s rapidly growing travel sector by bringing together OYO’s economy, mid-segment, and vacation rental assets and its travel customer base, along with GoIbibo and RedBus.

Recently, MakeMyTrip partnered with Flipkart; as part of the agreement, the ecommerce company will offer travel services from MakeMyTrip, Goibibo, and redBus on its platform. MakeMyTrip will be able to leverage Flipkart’s growing consumer base to drive online bookings in travel services.

MakeMyTrip’s major competitors are Yatra, ixigo, TravelTriangle, YuMiGo, HolidayIQ, ClearTrip, Expedia, the Ebix-acquired Via.com, Hotels.com, and Booking.com.

According to a Google India-BCG report, the country’s travel market (both offline and online) is expected to become a $48 Bn industry within the next three years. According to an IBEF report, the online travel space will likely account for 40% to 50% of the total transactions by 2020.

With the commercial agreement between OYO and MakeMyTrip leading the latter to delist other partners, and raising concerns among independent hotel owners, MakeMyTrip needs to examine whether it is ready to lose out on major contributors to its business.

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