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OYO threatens to take legal action against hotels for declining bookings

Press Trust of India/New Delhi 10 Jan 19 | 07:50 PM

OYO Logo | Photo: Wikimedia Commons

Hospitality firm OYO Thursday said it would take strict legal action for breach of contract against any hotel on its platform that boycotts bookings under the influence of small vested interest groups.

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Most of the boycott threats are being made by small groups of people who have no property associated with OYO, the company said in a statement.

OYO has not received any formal communication from any of its asset owners and the company continues to engage with its franchisee hotel owners on a one-to-one basis to resolve issues, OYO Hotels & Homes Head of Supply Ayush Mathur said.

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"However, some such individuals have also been threatening to ignore the agreements and not accept online bookings, which will lead to breach of contract and involve legal liabilities as we cannot and will not let anyone hamper the customer experience. We will take strict legal action and take them to court," he added.

Refuting the charges regarding deep discounts, Mathur said: "As per our agreement with our hotel owners, like many of our peers as well other brands operating franchising model, prices are determined by OYO."

"We have 100 per cent inventory, and determine price using a dynamic pricing mechanism to create a level-playing field for even an independent hotelier while providing affordable and accessible accommodation options to the customer," said Mathur.

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The company also emphasised complete inaccuracy of claims made by certain individuals and interest groups that have alleged that OYO charges 40 per cent franchise fees.

"OYO has not charged franchise fees over 25 per cent and neither does it intend to, unless it invests in capital expenditure to transform a home or hotel space for better footfalls and occupancy," Mathur said.

OYO said it is engaging with the Federation of Hotel and Restaurant Associations of India, and is open to creating a platform for potential discussions and inviting all other hotel chains in the country who operate leased or franchised assets to be a part of the discussion.

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