More than 200 hotels have broken the agreements with Oyo over mismanagement of contracts, arbitrary charges and other disputes, industry associations said, adding that others want to exit contracts but are stuck for various reasons. Oyo disproved the allegations.
“This is more dominant in the south and west but now hotels in north India are also doing this,” said Gurbaxish Singh Kohli, vice president of the Federation of Hotels and Restaurant Association of India (FHRAI). 
“We are hearing that about 200 hotels would have ended their agreements with Oyo and more are joining in. Notices have been sent by the company to some as they are trying to scare the hotels, but you cannot force anyone to do business with you. They are showing their might and trying to arm-twist smaller hotels.”
Oyo said there was no such development.
“Barring some isolated cases (as in Rajasthan) on account of breach of contract over repeated offences that could endanger guest safety and security, and reminders on following certain operating norms, all of which are identified and evaluated as per standard process in any agreement, we have not taken any such measures,” said an Oyo spokesperson. “Outside of that, we have not seen churn or any dissatisfaction at either end.”
DVS Somaraju, executive committee member of the South India Hotel and Restaurant Association (SIHRA), said about 60-70 hoteliers have ended agreements with Oyo in the region. “Hoteliers did raise issues against Oyo with us. Many want to break these agreements. We are supporting non-members as well,” he said. SIHRA has about 1,400 members.
‘Threats of Defamation Suits’
The associations have alleged breach of contract, arbitrary revisions of commission rates, stopping minimum guarantee amounts, threatening legal notices, mismanagement of accounting and endorsement of unlicensed bed and breakfast accommodation.
“We have been engaging with the FHRAI, the apex body, and its respected executives on the potential of a larger discussion by inviting all hotel chains who lease or franchise in the country,” Oyo said. “We will not acknowledge, recognise or engage with the state/ city/ segment association that can be formed overnight by people with vested interests.”
Oyo accused hotel owners of conflict of interest.
“We have been engaging with our hotel owners on a one-on-one basis, which has helped us resolve issues harmoniously, or in an edgy case, part ways amicably,” the spokesperson said. “We strongly believe that most of the association representatives leading this public uproar are people who operate competing assets and using the garb of the association to veil their competing business agendas (conflicts of interest) and protect their vested interests.”
Tarun Bansal, committee member of Hotel Association of Jaipur, said Oyo responded to complaints with threats of defamation suits.
“We had a list of grievances but there has been no communication from them,” he said. “Instead what we got was a quasi-legal notice to our president and vice president implying they are indulging in defamatory activities and spoiling the goodwill of the company, so action will be taken against them. They talk of defamation, but they are not talking of how issues can be resolved.”
Akhlaq, an Oyo partner who owns Hotel Pink Palace in Jaipur, is considering ending his agreement with the company. He said 60-70% of margins had eroded because of wrong rates and that he’d got threatening emails and messages when he expressed concern.
“I cannot work with such a hostile partner,” he said. “They have blocked my property from January 15 as I had expressed concerns. A room sold to a customer for Rs 9,500 was shown to have been booked for Rs 5,700 to me,” he said.
Hotel Association of Jaipur joint secretary Aseem Parakh said Oyo had sold rooms below the minimum rate.
“There are many accounting flaws and partners who had ended their agreements are still showing up on their app,” he said. “The booking amount is different and the amount conveyed to hoteliers is completely different. On no shows, they show check-ins and have been charging commissions. Hotels worth Rs 1,500-2,000 as per the floor price are sold for Rs 500.”
Ashraf Ali, president of the budget hotel association of Mumbai, said about 40 hotels have ended contracts with the company in the city.
“We are collecting documents and agreements from Oyo partners as there are no stamp duties and stamp paper on some of these agreements,” he said. “Oyo controls their Google listings and we are forming a legal team which could assist them to take back their credentials once they are delisted so that they can do their business on their own.”
The row between the hotels and Oyo has been simmering for several months as the company, flush with funds from SoftBank and others, looks to expand rapidly in India and overseas. In December, Oyo said complying with the demands of hoteliers would see accommodation rates rising by as much as 40%.
Source:Economictimes
