OYO fights back on contract breach claims; says, hotels’ demand will raise prices by 40 per cent

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Updated: December 11, 2018 8:40:38 PM

OYO says complying to the hoteliers demands will not only make the category expensive for customers but will also lead to a drop in occupancy.

OYO fights back on contract breach claims

OYO says complying to the hoteliers demands will not only make the category expensive for customers but will also lead to a drop in occupancy.

Online hotel booking platform OYO has refuted the claims of breach of contract made by the hotels association and has said that the hoteliers’ demands will make budget stays expensive by as much as 40% for customers. The Federation of Hotel & Restaurant Associations of India (FHRAI) recently issued warnings over alleged large-scale breach of contracts by OYO, jeopardising customer safety and violating laws. OYO, in its response, called the warning to be based on invalid claims by ‘certain bodies’ that seem to have been misleading FHRAI.

“Them (hoteliers) coming together and creating a collective public uproar to get their unreasonable and vested demands fulfilled is not in the best interest of the consumers or asset owners,” OYO said in a statement, responding to a letter issued by FHRAI.

FHRAI, in a letter dated 10 December 2018, said that OYO 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.

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The hotels body accused OYO of: “Unfair and arbitrary revisions of commission rates, threatening legal notices, levying of convenience charges, obtaining hotel client database 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”.

OYO, on its part, said that introducing the dynamic pricing is a forward-looking business practice which would help create a level playing field for small hoteliers, and that pushing it back will only hurt the industry. “The pushback on adoption of these forward-looking business practices will, in the long run, be detrimental to the hospitality landscape, hoteliers and most importantly the customers, and result in the unavailability of quality accommodations at affordable prices,” the company said.

On an average, 75% of hotel owners associated with OYO have seen an increase of 20-30% in occupancy in the first three months of operation as an OYO branded property, the statement said.

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