Budget Hotels Revolt Against Oyo Rooms; Announce Boycott In Mumbai, Other Cities

This looks like the cat and mice game of throwing and receiving allegations.

By Radha Joglekar On Jan 10, 2019

$5 billion worth OYO Rooms, India’s 2nd largest startup, is facing fresh troubles, from small hotels

Oyo is a platform that displays all the hotels and lodges available for people to halt for the night.

The popular hospitality company is in trouble as it has been boycotted by the Budget Hotel Association of Mumbai.

The Budget Hotel Association of Mumbai formed a pan India association Hotel Association Confederation of India and they have reached a decision of not partnering with OYO anymore.

The reason behind the sudden decision is deep discounting, mismanagement of operations, and arbitrary contract changes in contracts.

The HACI – Hotel Association Confederation of India

Ashraf Ali, joint convenor at HACI said, “Our new proposed organization, HACI, has the support of 47 pan India associations which have about 8000 hoteliers as members. OYO has become more stubborn and our concerns still exist. They are trying to contact individual hoteliers, which is not useful. Our OYO-listed partners in Jaipur will not accept bookings from January 15, which will be followed by other cities like Mysore and Shirdi and later Mumbai.”

Ali said that about 50-60 hotels in Jaipur will boycott OYO unless they reach a convenient solution for both parties by January 15th. According to Ali, payments are being held up and additional charges by OYO have been hidden strategically, and this has aggravated hotel owners.

HACI convenor, Surya Prakash said that the association will focus on tier two cities in the initial step. He added that platforms like OYO and others started growing because there was no unity in the hotel industry and that they have filed online petitions. He pointed out that there is a fault in the business model that has been highlighted.

False claims – OYO responds

OYO, on the other hand, washed their hands off of all claims of mismanagement and breach of contracts, saying that they were misguided, misplaced and based on false allegations made by a small group of people with twisted intentions.

As per OYO, the changes demanded by the hotel owners will increase the prices for customers by about 40%. These hotel owners, according to OYO, are a smaller part of the total number of hotel owners.

In December, Federation of Hotels and Restaurant Association of India (FHRAI) were reported to have approached the Commission of India and tourism ministry to complain against such online hotel booking portals. After taking action against portals like MakeMyTrip and GoIbibo in November, the FHRAI had warned OYO of protests that might take place nationwide, if they refused to negotiate with the hotel owners’ body.