The Federation of Hotel and Restaurant Associations of India (FHRAI) on Wednesday accused two major online travel aggregators (OTAs) of allegedly offering 'illegal' discounts that, it said, were harmful to hoteliers and customers in the long run.
Citing violation of the legal pact, the FHRAI has now put MakeMyTrip and GoIbibo on notice and also threatened to hold a nationwide protest against OTA entities.
Terming as 'unethical' and 'exploitative' business practices by the OTAs, the FHRAI in a statement issued here alleged, "The biggest industry concern is that after securing discounted rates from a hotel, the OTAs further discount it on their online platforms without our consent. This damages our reputation and distorts the market scenario."
FHRAI Vice President and Hotel and Restaurant Association of India, Western India, president GS Kohli pointed out that they (OTAs) have a clause in their agreement forbidding hotels from discounting their own rates but are themselves free to do so, besides demanding exorbitant commissions, hosting illegal and unlicenced Bed & Breakfast accommodations.
The OTAs commissions range from 18-40 per cent, adversely hitting the revenues, business and livelihood of the hotel industry, he alleged.
"An immediate solution to the issues that threaten our livelihood, investments and businesses is extremely necessary and call for an active dialogue with the OTAs," added FHRAI Joint Secretary Venkada Subbu.
The FHRAI also called the OTAs move to provide Bed & Breakfast (B&B), motels or accommodations even when they were unlicensed on their platforms as "illegal", which disrupt the business of the organised hotels.
"More than 40 per cent of the room inventory available on the OTAs is illegally operated. The so called B&Bs are operating without valid licenses from local or State authorities. Since these operators do not have to pay for licences and the statutory fees, they are cheaper by default. This disrupts the spirit of a level playing field by pitting the fly by night operators against the organised sector and is also a huge loss to the exchequer," S K Jaiswal, Vice President (North), FHRAI alleged.
