Over 500 hotels in 100 cities may have snapped ties with hospitality chain Oyo hotels and homes since April due to severed relationship following several conflicts. The hotels have in the past blamed Oyo of contract violations, stoppage of minimum guarantee amounts, arbitrary commission rate changes and threatening legal notices etc.
"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," Pradeep Shetty, honorary secretary, Federation of Hotel and Restaurant Associations of India (FHRAI) told the Economic Times.
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"We are estimating around 500-700 hotels having exited Oyo since April," he added. The FHRAI has also submitted its complaint to the competition commission of India (CCI) which is currently probing the matter.
The hoteliers told the news daily that despite cutting ties, they have not been able to take back control of their online listings, showing the properties as being sold out on Oyo. Moreover, customers have been complaining on social media that hotels were not accepting bookings made on Oyo when they tried to check in.
"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," Shetty added.
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Majority of the partnerships between hoteliers and Oyo ended in June and July when differences between them intensified. Most of the exits were from Bengaluru, Goa, Gurugram, Chennai, Hyderabad, Kolkata, Nodia and Pune.
Meanwhile, disputing this an Oyo spokesperson said, ""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."
Meanwhile, the hospitality chain has denied this accusation and said that the numbers cited in the report were "incorrect" and "inflated". The company claimed that its annual retention is as high as 99 per cent across India and South Asia.
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"We have over 18,000 asset owners in India alone and assuming even 1% churn, of which, at least 50% is unregrettable, which means these are hotels that have been deflated by OYO for not having met quality standards and not cases where owner is cancelling contracts, the correct number would continue to be less than 100 = 0.55%, well within the standards of any company, in any industry operating on a franchise or lease contracts," an Oyo spokesperson said.
"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, while rewarding asset owners who continually improve and set new standards of customer experience," the spokesperson further added.