FHRAI writes a letter to online travel aggregators outlining the most critical concerns of the hotel industry which includes the issue of distortion of market price, the demand for exorbitant commissions and the hosting of illegal and unlicensed bed and breakfast accommodations
Mumbai: Hoteliers have warned of a nationwide protests against online travel aggregators MakeMytrip and Goibibo if the issues of “unethical" business practices raised by several hospitality firms is not resolved amicably.
Federation of Hotel & Restaurant Associations of India (FHRAI), a hospitality body, on Wednesday said it has put MakeMytrip and Goibibo on notice in response to grievances expressed by several of its hotel members.
In a statement issued by FHRAI, the association said it has written a letter to the OTAs “outlining the most critical concerns of the hotel industry which includes the issue of distortion of market price, the demand for exorbitant commissions and the hosting of illegal and unlicensed Bed and Breakfast accommodations."
It also said that OTAs’ business practices were “exploitative, unethical and divisive led to predatory pricing and other market distortions" that could potentially harm both hoteliers and consumers.
Hotels have alleged that OTAs charge commission that range anywhere between 18 and 40%. The exorbitant commissions have been adversely impacting revenues, business and the livelihood of hoteliers, FHRAI said.
“One of the biggest concerns is that after securing discounted rates from a hotel, the OTAs further discount it on their online platforms without the hotel’s consent. This damages the hotel’s reputation, and also simultaneously distorts the market scenario," said Gurbaxish Singh Kohli, vice president – FHRAI and president – Hotel and Restaurant Association of Western India (HRAWI).
According to Venkada Subbu M, secretary, FHRAI, the high commission charged by OTAs have rendered hotels helpless. “An immediate resolution to the issues that are threatening the livelihoods, business, investments and entrepreneurial initiatives has become extremely necessary," he said.
The Federation has alleged that OTAs are legitimising the unlicensed Bed & Breakfast (B&B), motels or accommodations by promoting them on their sites and apps whilst disrupting the business of the organised hotels.
In response to the warning, a MakeMyTrip spokesperson said the company is actively engaged with its hotel partners and also in dialogue with FHRAI. “ We are confident that we will be able to resolve any concern amicably," the person said.
In October 2016, MakeMytrip and Ibibo group had agreed to merge together in a stock transaction, making it one of the largest consolidation in the travel space.
