HospitalityBiz India
Hotels FoodService Operations Ministry Associations Equipment Editorial HR Technology Technology Advisory Board Community
Follow us on Facebook Follow us on Twitter instagram
    Home > NewsTrack

FHRAI warns of action against Oyo for large scale breach of contracts

FHRAI has called Oyo for a dialogue before the issue snowballs into a nationwide protest

Tuesday, December 11, 2018, 11:00 Hrs  [IST]
HBI Staff | Mumbai

After issuing a notice to Online Travel Aggregators (OTAs) – MakeMyTrip and Goibibo, the Federation of Hotel & Restaurant Associations of India (FHRAI), has warned of action against Oyo alleging large scale breach of contracts, jeopardising the safety of consumers and violation of laws.

In a letter dated December 10, 2018, FHRAI has pointed out to the company that it is endorsing illegal and unlicensed bed and breakfast apartments, flats in residential and commercial buildings, rooms in chawls and such other independent structures as hotels. 

“Such positioning of hotels is tantamount to misleading the guests. When a guest books in a hotel they expect to stay in a hotel and not in an apartment or a residential premise. This not only harms the reputation of hotels in India, but also constitutes potential safety hazard for the guest,” said Gurbaxish Singh Kohli, VP, FHRAI and president – Hotel and Restaurant Association of Western India (HRAWI).

“It is a matter of fact that Oyo rooms entered into contracts with number of hotels for the sake of loading inventory or for exhibition of numbers. Unfortunately, it is reported that you have been reneging on all your obligations and in fact adopting exploitative and coercive methods against hotels who have protested. 

Unfair and arbitrary revisions of commission rates, threatening legal notices, levying of convenience charges, obtaining hotel client data base and approaching them directly, unfair levy of audit denial charges, stopping of minimum guarantee amounts or abysmal drop of room rates in such cases, issues with Oyo money, lack of transparency and internal resolution mechanism to deal with all issues of hotels, inconsistent and variable rates of commissions across the board and unfair levy of room deviation charges, among others are some of the problem areas that are required to be addressed. 

"Although these pertain to breach of contracts between parties, the sheer number of such grievances from Hotels is a matter of concern,” the letter stated.

FHRAI has called Oyo for a dialogue before the issue snowballs into a nationwide protest.

Oyo said 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 to address the same. 

"Having said that, we believe that the allegations are misguided and misplaced, and depict cartelization by small groups of people (not necessarily by franchisees and lessors associated with Oyo Hotels) with vested interests, which is not in the best interest of the consumers," said an Oyo spokesperson. 

Hotel players are alleging that Oyo had initially approached them offering a strategic partnership by sharing room inventories. However with time, as the room aggregator became stronger with deeper pockets, it started twisting them and asked them to forgo minimum guarantee fee and change existing contracts. 

“The hospitality industry’s fundamental tenet is seamless experience for guests. Any internal dispute between the stakeholders of the industry will affect the customer. The current rift between hotels and aggregators is moving in this direction, and it is the Federation’s intention to avoid this eventuality. So we have decided to open up a bilateral talk arrangement with Oyo and hope that we arrive at a win-win situation for all,” said Pradeep Shetty, joint honorary secretary, FHRAI.

(Source : Economic Times)

Print News Email News Back
Bookmark to Add to NewsvineNewsvine Bookmark with Digg ItDigg
Add RSS to Add to Google Add to My Yahoo! Subscribe with Bloglines Subscribe
* Name :    
* Email :    
* Message :  
»  Restaurant operators should be allowed to sell food up to 1 am in Nagpur : S P Singh
»  IMC organises online interaction on Multi-Pronged Strategies to Rebuild Tourism and Travel
»  FHRAI requests Govt to reconsider decision for Hospitality Industry
»  FHRAI reaches out to states over dire situation of hospitality industry
»  Almost 65% Indians intend to travel for leisure and explore new destinations in 2021, reveals report
»  FHRAI appoints Dr Himanshu Talwar as the Additional Director at FHRAI Institute of Hospitality Management, Greater Noida
»  FHRAI & HRAWI writes to Maha CM requests urgent facilitative measures for hospitality industry
»  IRCTC and FHRAI join hands to offer accomodation to tourists
»  FHRAI Institute of Hospitality Management appoints Arun Kumar Singh as Director
»  HRS Redefines Sustainable Business Travel with Green Stay Initiative
»  FHRAI writes to Government, requests recognition for hospitality workers as ‘Frontline Corona Warriors’
»  FHRAI initiates #GoDirect campaign
»  Outlet Buddy, a new online kitchen for restaurants
»  FHRAI requests FM to increase the threshold limit for zero GST for hotel room tariffs
»  WICCI National Hospitality Council Announces Online Classes for hospitality professionals
»  POSist appoints Ajay Singh as the Chief Growth Officer to drive global expansion
»  Domestic travel will continue to aid recovery for hotels in 2021: JLL
»  Marriott Bonvoy Mobile App refreshed to offer personalised experience for travel
»  Disappointed with the budget for Hospitality Sector, FHRAI seeks meeting with the Prime Minister
  The Indian Institute of Architects (IIA) Natcon 2020 virtual event concludes successfully
  Winners of The Park Elle Décor Student Contest felicitated at Indian Design ID 2020
Receive the best of Hospitality content in your mailbox.
Weekly e-Newsletter
Events Calendar

© Copyright 2016 Saffron Synergies Pvt Ltd