LIVE TV
ZEE Business
ZEE BUSINESS
हिंदी में पढ़ें  हिंदी में पढ़ें
Live TV
Live TV
  • Home
  • Budget 2021
  • Personal Finance
    • PPF
    • Mutual Funds
    • Income tax
    • EPFO
    • Income Tax Calculator
    • Personal Loan Calculator
    • Car Loan Calculator
    • Home Loan Calculator
    • SIP calculator
    • SWP Calculator
    • MF Returns Calculator
    • Lumpsum Calculator
  • India
    • Companies
    • Property
    • Startups
    • Uidai
  • Economy
    • Aviation
  • Tech
    • Mobiles
    • Apps
  • Auto
    • Cars
    • Bikes
  • Markets
    • Commodities
    • Currency
  • Jobs
  • Indian Railways
  • World
    • Economy
    • Politics
    • Markets
  • videos
  • photos
  • Authors
  • More ...
    • VIDEOS
    • PHOTOS
Read in App
Business News » Companies News

FHRAI warns OYO of action for contract breaches; firm strongly denies allegation

After putting online travel aggregator MakeMyTrip on notice, the Federation of Hotel and Restaurant Associations of India (FHRAI) Monday warned OYO of action, alleging large-scale breach of contracts, jeopardising consumers safety and violation of laws by the hospitality firm.  

  • Twitter
  • Facebook
  • Linkedin
  • whatapp
  • View in App
FHRAI warns OYO of action for contract breaches; firm strongly denies allegation
OYO, however, strongly denied the charges, saying it believes that the demands made are representative of a certain level of cartelisation and will lead to consumers seeing a price hike. Image source: PTI
Written By: PTI
Updated: Mon, Dec 10, 2018
10:41 pm
PTI
RELATED NEWS
OYO’s mid-segment sees 92% traction in 3 months; attracts over 300 corporate brands OYO’s mid-segment sees 92% traction in 3 months; attracts over 300 corporate brands
GoAir smart deals: Flyers can avail OYO, Myntra, ZoomCar offer till this date! GoAir smart deals: Flyers can avail OYO, Myntra, ZoomCar offer till this date!
OYO to acquire Amsterdam-based @Leisure Group for $415 mn OYO to acquire Amsterdam-based @Leisure Group for $415 mn
OYO Near You: OYO unveils new initiative for customers OYO Near You: OYO unveils new initiative for customers
Best companies to work for in India: Flipkart, OYO, Paytm, Swiggy among Top 10 Best companies to work for in India: Flipkart, OYO, Paytm, Swiggy among Top 10

After putting online travel aggregator MakeMyTrip on notice, the Federation of Hotel and Restaurant Associations of India (FHRAI) Monday warned OYO of action, alleging large-scale breach of contracts, jeopardising consumers safety and violation of laws by the hospitality firm.  OYO, however, strongly denied the charges, saying it believes that the demands made are representative of a certain level of cartelisation and will lead to consumers seeing a price hike.

In a letter to OYO Founder and CEO Ritesh Agarwal, the FHRAI said apart from breach of contracts, 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, rooms in chawls and such other independent structures as hotels.

"Such positioning/endorsement is not only misleading, but also a potential guest safety hazard," the letter said. Unfortunately, OYO has been reneging on all its obligations and in fact adopting exploitative and coercive methods against hotels who have protested, it added.  The other issue raised in the letter is distortion of market price and predatory pricing. 

"However, it is also well known that you are further discounting over and above the listed prices offered by the hotels without their consent, thereby, causing loss of image to the individual Hotels and distortion of the market scenario," the letter said. It is also well known that the use of disparity clause in rates is one sided that is the hotels cannot discount their own rates, but OYO is clearly breaching the same clause for market cannibalisation, the letter said.

Another issue raised by the letter is that of exorbitant commissions charged by the hospitality firm. "It is reported that commissions being charged by OTAs are ranging from 20 - 35 per cent, thereby, adversely affecting the revenues, business and livelihood of Hotel owners. Such rates of commissions duly supported by enormous discounting from your end, have rendered hotels helplessly facing an atmosphere of unfair competition," the letter said.

Another issue flagged by the letter of FHRAI Vice President Gurbaxish Singh Kohli said: "We have to state that a large number of the room inventory available on your platforms are illegally operated without valid licenses from local/ state authorities."

While calling for an active engagement and dialogue between OYO and the hotel industry, the letter said: "We wish to further express our desire to explore possibilities of amicably resolving the issues mentioned herein before calling for a nationwide protest against your organisation."

Strongly rebutting the charges made by FHRAI, OYO said it is actively engaging with the asset owners, franchisees and lessors associated with OYO Hotels, on a one to one basis to address recommendations made by certain bodies.

"We believe that the allegations are misguided and misplaced, and depict cartelisation by certain 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," a OYO spokesperson said in a statement.

"The collective uproar by certain industry bodies that represents a very small section of asset owners part of OYO's network, demanding a series of changes in the current working mechanism will lead to an increase in prices by over 40 per cent, and resultant unavailability of quality accommodations," the statement said. 

Emphasising that OYO has never charged over 25 per cent franchise fees unless it invests a huge amount of capex in the property, and does not intend to in the future as well.

"Like other players, we operate our leased and franchised assets, similar to any other mid-market hotel chain and we have a strict compliance culture," the statement said.
  
 

Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.

TAGS:
Oyo RoomsMakeMyTripFHRAI
RELATED NEWS
OYO’s mid-segment sees 92% traction in 3 months; attracts over 300 corporate brands OYO’s mid-segment sees 92% traction in 3 months; attracts over 300 corporate brands
GoAir smart deals: Flyers can avail OYO, Myntra, ZoomCar offer till this date! GoAir smart deals: Flyers can avail OYO, Myntra, ZoomCar offer till this date!
OYO to acquire Amsterdam-based @Leisure Group for $415 mn OYO to acquire Amsterdam-based @Leisure Group for $415 mn
OYO Near You: OYO unveils new initiative for customers OYO Near You: OYO unveils new initiative for customers
Best companies to work for in India: Flipkart, OYO, Paytm, Swiggy among Top 10 Best companies to work for in India: Flipkart, OYO, Paytm, Swiggy among Top 10

LATEST NEWS

Indian Army Recruitment Rally 2021: 8th pass, 10th pass can apply; know where to apply and other details

PUBG Mobile Lite Season 22 Update: Check release date, timings, APK download link and MORE!

Yes Bank Share price today: Technical and Fundamental Analysis I Investec cuts target price to Rs 19

RailTel share price hits 20% upper circuit after steller listing in last session: Retail Investors are delighted

IRCTC Share price: Dolat Capital initiates coverage on IRCTC share with target of Rs 2650

REVEALED: 'Laga bhi diya...' - What PM Narendra Modi told nurse P Niveda after COVID-19 vaccine shot

Modi government creates RECORD! New feat achieved in highways construction - Nitin Gadkari confirms this

Petrol, Diesel Prices Today in your city– Monday relief; Know how to EARN MONEY from rising oil prices

LPG cylinder price today: Cooking gas gets costlier by Rs 25, second hike in four days—check new prices

Heranba IPO allotment status: Finalisation date, direct BSE link to check share subscription

  • India News
  • World News
  • Companies News
  • Market News
  • Personal Finance News
  • Technology News
  • Automobile News
  • Small Business News
  • Income Tax Calculator
  • Live TV
  • Videos
  • Photos
  • Author
  • Rss Feed
  • Advertise with us
  • Privacy Policy
  • Legal Disclaimer

Latest Trending Updates

  • EPFO
  • Budget 2020
  • Income Tax Return
  • Auto Expo 2020
  • Home Loan
  • Business News

Trending Topics

  • Income Tax
  • income Tax Calculator
  • 7th Pay Commission
  • Reserve Bank of India
  • GST
  • Latest Business News

Follow us on

zeebiz
zeebiz

Partner Sites

  • Zee News
  • Hindi News
  • Marathi News
  • Bengali News
  • Tamil News
  • Malayalam News
  • Gujarati News
  • Telugu News
  • Kannada News
  • DNA
  • WION
Copyright © Zee Media Corporation Ltd. All rights reserved