The last few weeks in the hospitality industry has been as eventful as the political landscape of the country. The battle between hotel associations and budget hotel chain, OYO Hotels, has been heating up and that battle has now reached the tourist hot-spot of Jaipur.
According to the press release by the company, two hotel owners, after allegedly coming under the influence of a small group of people with vested interests, installed hoardings overnight on their premises, dishonoring the bookings with OYO. The company has termed the incident as a clear breach of the exclusive and full inventory based franchise agreement where OYO hotels has invested hundreds of crores of capex for improved quality of experience however these groups of vested owners have resorted to frauds and breaches of contracts to hurt the customer in a state where “padharo mhare des” is a synonym and welcoming the customer and enabling a great experience is a priority.
Some associations have accused the budget hotel chain of exploitation for selling rooms to consumers at a very low price point via deep discounting, and targeted them for offering otherwise charged services like included breakfast, 24 hour internet services for free, resulting in decrease in profit margins for the budget hotels, ignoring the benefits received from increased occupancy rate throughout the year.
On other hand, OYO Hotels & Homes, Head of Supply, Ayush Mathur stated that, “This problem will vanish overnight if we were to give in into the hotel owners demands and increase prices, but then it not only defeats the purpose of our investment in technology to facilitate affordable hotel accommodations across the country."
Mathur further said, "This is grossly anti-consumer, especially for the outstation travelers and tourists that are contributing towards the local economy and at the same time seeking quality accommodations at affordable prices in Jaipur. Their demands are unacceptable. Giving into these demands will result in prices going up by 40%, impacting millions of tourists, who will then have no other choice but to go back to living with their extended family and friends, or dealing with touts to find an affordable room. Even for the hotel owners, the demand for rooms will severely drop, so will occupancy, hence resulting in severe losses for our franchise owners across Rajasthan."
Stating that this Breach of Contract along with frauds of Hotel Rang Mahal, Jaipur, Hotel Amer View, Jaipur, and Hotel Rajputana Haveli, Jaipur is completely unacceptable and anti-consumer in nature, OYO has taken strict legal action against these three hotels even though the company has received multiple threats of how certain individuals will resort to mudslinging to tarnish OYO hotels’ promise to its customers, the company said.