FHRAI seeks intervention of tourism ministry

The Federation of Hotel and Restaurant Associations of India (FHRAI) seeks assistance the of tourism ministry to find an amicable settlement of their dispute with online travel aggregators (OTAs) Go-Ibibo and Make My Trip (Go-MMT), and hospitality chain OYO Hotels. FHRAI has written to the Minister of State for Tourism, K J Alphons in this regard.

It was informed by FHRAI in a media statement that they have written to the minister outlining the major issues of concern to the industry because of the OTAs’ unfair and arbitrary business practices. It claimed that a number of FHRAI’s members are experiencing hardships due to the OTAs’ business ethics it claims are ‘exploitative, unethical and divisive, leading to predatory pricing and other market distortions.’

“The hotel industry in the country is going through a very challenging phase which is threatening the livelihood, business, investments and entrepreneurial initiative and spirits of the hospitality industry, and thereby eroding the viability of the sector,” states the letter to the minister.

“The FHRAI has tried to resolve the issue directly with the OTAs, however instead its CEO has chosen to dismiss FHRAI’s role in the matter. It leaves us with no choice but to ask for the Government to step in and create a norm for the OTAs just as the Commerce Ministry has done for the e-tailers recently,” said Gurbaxish Singh Kohli, vice president, FHRAI and president, Hotel and Restaurant Association of Western India (HRAWI).

Meanwhile, OYO had denied allegations of large-scale breach of contract and predatory pricing levelled against it. Oyo have stated that the allegations were misguided and misplaced and depicts cartelization by small groups of people (not necessarily by franchisees and lessors associated with OYO Hotels) with vested interests.

“FHRAI has no authority to determine commercial agreements between MMT and the establishments on its platform,” state Deep Kalra, MakeMyTrip (MMT) group chief executive.

Earlier in December 2018, The FHRAI had issued notices to MakeMyTrip and alleging that business practices followed by OTAs were exploitative, unethical, and divisive, and led to predatory pricing and other market distortions.

The Hotel and Restaurant Association of Gujarat and some other states have also decided to boycott certain online booking portals, citing biased and unilateral business decisions taken by them including MakeMyTrip, Goibibo, RedBus and OYO.