Oyo Rooms Is Running Illegal Operations In Shimla; Destroying Local Hotels With 50% Discount

After Kochi, Bengaluru and Jaipur, hoteliers in Shimla have revolted against Oyo Rooms. They have made some serious accusations against Oyo Rooms, which include illegally running operations, and unethically offering more than 50% discount.

This is destroying Shimla’s hotels, and ruining their livelihood.

Oyo has denied these allegations.

Shimla Hoteliers: Stop Oyo Rooms From Destroying Us

Tourism Industry Stakeholders’ Association, which is a lobby of hoteliers in Shimla has alleged that Oyo Rooms is running their operations in flats and houses, without Govt. permit. 

Hence, Oyo Rooms is breaking Indians laws.

As per Mohinder Seth, who is the President of Tourism Industry Stakeholders’ Association, Oyo Rooms hasn’t taken any permission from Himachal Pradesh Tourism Department for running hotel, homestay or travel agency.

As per Tourism Ac, 2002, such permission is necessary for running such hotel, homestay or travel agency. 

He said, “We have urged the state government to ensure registration of OYO to stop such unhealthy and unethical practices, which are causing loss to the state exchequer,”

Oyo Rooms Unethically Offering 50% Plus Discounts

During the lean season, hoteliers in Shimla cannot afford to provide more than 50% discount for tourists.

But Oyo Rooms, which is World’s 3rd largest hotel chain right now, is flexing its muscles, and providing deep discounts of more than 50% to their users right now.

This is severely impacting small and middle-scale hotels in Shimla, and forcing them to incur huge losses.

Mohinder said, “As per norms and guidelines, the hoteliers cannot give more than 50 per cent discount to customers during the lean season, but OYO is offering hefty discounts over and above the maximum limit, which is unethical and affecting the genuine hotel industry,”

We checked Google for Oyo Room tariffs in Shimla, and indeed found hotels and home-stays with 50-70% discount right now.

Oyo Founder Ritesh Agarwal, who has a net worth of Rs 7500 crore, and is the youngest self-made billionaire in India right now can afford to infuse massive capital in small and vulnerable hotel industry in Shimla, and this is negatively impacting the ecosystem.

Sanjay Sood, president of the Shimla Hotel and Restaurant Association said, “Incidents of illegal accommodations being run by OYO have come to our notice and we have told the hotels not to tie up with OYO,”

Area manager of OYO, Shimla has refused to comment on these allegations.

We will keep you updated, as more details come in. 

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