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OYO Has Severed Ties With 500-700 Hotels Across The Country

More than 500 hotels in 100 cities have checked out of OYO since April. As relationships soured after various disputes including contract breaches, arbitrary commission rate changes, stoppage of minimum guarantee amounts and threating legal notices among others, the Soft-bank backed hospitality chain OYO has snapped relationship with almost 500 hotels in 100 cities across the country.

Pradeep Shetty, Honorary Secretary of Federation of Hotel Restaurant Associations of India (FHRAI), stated “Many state and city associations have reported instances of large-scale termination of contracts with OYO as also protests held by small local hotels against non-payment and other problems faced by them. It has also been reported to us that hotels are not being allowed to exit from OYO due to holding back of the ‘no-objection’ certificate by the company”. Further adding on that about an estimated 500-700 have exited OYO since April.

However, the trouble doesn’t end there for the Indian-Hospitality brand.

Previously accused of contract breaches, arbitrary commission rate changes and other violations, the FHRAI has complained to the Competition Commission of India (CCI) against OYO. With CCI investigating the matter, the Indian-Hospitality brand has denied all accusations as “incorrect” and “inflated”. Hotels exiting from Bengaluru, Goa, Gurugram, Chennai, Hyderabad, Kolkata, Noida and Pune, hotels have not been able to take back control of their own online listing, despite cutting ties. 

However, an OYO spokesperson has come forward to make a statement to Business Today regarding the above as follows: 

“We voluntarily deflate some hotels annually due to quality issues. As we continue to strengthen our focus on customer experience, we are taking strict measures against hotel owners who don’t comply with our quality metrics and compromise customer satisfaction.”

Despite its recent funding round led by Softbank for a USD 1.5 billion series-f financing, customers are calling out OYO for it’s below par service and booking woes. With hotels reportedly suffering large losses, the company seems to be holding onto the properties on their own platform, come arbitration or not.

Neeraj Jain, a member of the Hotel and Restaurant Association of Eastern India and Hotel and Restaurant Association of Orissa said, “Hotels that have ended agreements are still getting reflected as ‘sold out’ and Oyo is not releasing the properties,” after ending partnership with OYO for three hotels in Orissa and Kolkata about seven months ago.

With the government also not stepping in to help these hoteliers, OYO’s plan to expand might be a make or break for the Indian-Hospitality brand.

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