FHRAI Frenzy Misplaced; Will Lead To Price Increase Upto 40%

On 10 December, in a letter, the Federation of Hotel & Restaurant Associations of India (FHRAI) has warned of action against OYO alleging breach of contracts and violation of laws.
 
In a letter, FHRAI has pointed out to the company that it is endorsing illegal and unlicensed Bed & Breakfast apartments, flats in residential and commercial buildings, rooms in sprawl areas and such other independent structures as Hotels. “It is a matter of fact that OYO entered into contracts with a number of Hotels for the sake of loading inventory or for an exhibition of numbers.
 
In response to the same, OYO has given a statement by adding that the allegations are based on invalid claims by certain bodies, that seem to have been misleading the apex body.

While OYO will continue to engage with FHRAI and with its asset owners on a one to one basis, to resolve issues if any, the company strongly condemns the misplaced demands of certain organizations, as the same are not in the best interest of consumers or asset owners.
 
 “Today, OYO Hotels and Homes, a full-scale hotel chain like many others, operates over thousands of franchised and leased hotels in India and hosts millions of guests from around the world. More and more people choose OYO every year than any other hotel chain in the country, and that is because of our collective focus on delivering high-quality customer experiences. We are privileged to partner with asset owners and independent hoteliers across the country and globally, to ensure a much higher occupancy leading to better financial returns on all of their hard-earned investments,” said OYO Spokesperson. On an average,75 per cent 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.

“We are aware of the recommendations made by FHRAI, and believe that the same are misguided and misplaced, and based on incorrect allegations made by small groups of people (not necessarily by franchisees and lessors associated with OYO Hotels) with vested interests. Neither are these demands aligned with the sentiment of the larger group of asset owners franchised or leased their property with OYO Hotels. Them 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.
 
 If OYO Hotels were to fulfill the unreasonable demands to  hike price, OYO Hotels will be the first beneficiary, but with our experience, we understand that this will disturb market dynamics and cause a disservice to both the customers and asset owners. Complying to these demands will not only make the category expensive for customers, with almost 40% price into hikecrease, and but will also lead to a drop in occupancy and thereby impact overall business adversely in the long run.