A day after increasing his stake in his own firm, through $2 billion worth equity buyback from early investors Lightspeed Venture Partners and Sequoia India, Ritesh Agarwal-led hotel chain OYO is now facing opposition from its hotel partners in India over levying new charges.
According to partner hotels, OYO is imposing unfamiliar charges on partners on an ad hoc basis for the last two months.
In some of the cases, the commission rates reportedly have gone up to 30%.
Taking note of this, the Federation of Hotels and Restaurant Association of India (FHRAI) has registered a complaint against OYO to the Competition Council of India (CCI).
The hearing of the case is scheduled on August 6.
FHRAI’s joint secretary, Pradeep Shetty alleged that in order to secure funding from investors, OYO has tweaked and tugged at every possible avenue at the expense of a hotel’s reputation and future.
The environment created by OYO has left hoteliers with no choice but to cut ties with it, Shetty added.
FHRAI even further advised its member hotels to legally terminate contracts and not let travellers suffer due to this.
Besides, Hotel owners also complained that nothing has changed in the last three months ever since OYO promised to give 18% interest on delayed payments and established compliant redressal solutions.
They say that new charges including boost services and branding fees levied without being that mentioned in the contract. There is also a lack of transparency in the payment, one of the hotel owners said.
In April, OYO had launched a new programme called OYO Partner Engagement Network (OPEN) for its asset owners.
Among the many promises, the company said that though transparent payment protocols, asset owners will receive 18% interest on delayed payments and resolution for exceptions will be done before the due date.
However, OYO spokesperson denied complaints of non-action through OPEN program in the last three months.
The company said it has enabled hundreds of crores of capex advances and investment support to asset owners since the program was launched and complaints are being resolved faster.