Oyo – A Thornbush

The Federation of Hotels and Restaurant Association of India (FHRAI) has reportedly filed a complaint with the Competition Commission of India (CCI) against Gurugram-based hospitality unicorn, OYO. The hotel body has asserted that three months after OYO promised its partners an 18% interest on delayed payments and launched complaint redressal solutions, the issues continue to be unconcluded.

Pradeep Shetty, joint secretary at FHRAI said, “No hotel or business wishes to turn down opportunities that may translate into revenues, but the environment created by Oyo has left hoteliers with no choice but to cut ties with it.” The matter has been scheduled for hearing on August 6.

The hotel owners have reportedly accused OYO of imposing new charges on partners over the last two months on an ad hoc basis. A Bengaluru-based hotelier alleged that OYO had convinced of no hidden charges, however, the rules have been changing nearly every month. The hotelier further asserted that along with convenience fee and charges on walk-ins and online payments, OYO will now charge them more depending on the guest ratings.

Mayank Nagrath, owner of three Oyo-listed properties in Delhi’s Karol Bagh and Paharganj said new charges levied on his properties include PLB charges, boost services and branding fees. “None of these is in the contract. They are charging for what they are referring to as branding services. They are defaulting on payments and levying monthly charges on field visits by their ground teams now,” he said.

The group has asked OYO to take restorative action as they now plan to create a bigger protest with around 550 hotels in Bengaluru. Further, FHRAI is now advising its members to legally terminate contracts if they so desire and ensure that travellers do not suffer.

Notably, the protest against OYO now comes after last month, Delhi High Court issued an ex-parte interim injunction order restraining Hotelier Welfare Association from boycotting OYO. The case developed where hotel asset owners from across the country started getting together to voice their concerns against OYO’s unfriendly business practices.

They had been alleging overlooked to agreed floor prices, deep discounting practices, non-transparent charges, irrelevant levies in addition to high-handedness and one-sided execution of the contract when it comes to deliverables by the hotel asset owners.
It issued a notice to the associations on the suit and listed the matter for further hearing on August 5.

Prior to this, on December 2018, the Federation of Hotel and Restaurant Associations of India said apart from breach of contract, most of its members have grievances with OYO, regarding support of and hoarding illegal and unlicensed bed and breakfast apartments, flats in residential/commercial buildings, and such other independent structures as hotels.

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