Oyo Hotels is booming world-wide, but Indian hotels are cutting ties: Reports

Published: 8 October 2019 - 12:45 p.m.
By: Hotelier Middle East Staff
Softbank-backed Oyo Hotels is making news across the world with its expansion, funding plans. However, back in India reports suggest that several hotels are cutting ties with the hospitality company.

One of Oyo’s strength’s is its transparent pricing, but several Indian hotels are complaining about being blindsided by a rise in the fees, the Economic Times (ET) reported.

More than 10,000 hotels have raised an issue against the company, Indian media reported.

Acccording to ET, Oyo charges hotels a roughly 20% franchise fee on room revenues when hotels join its network, but some Indian operators have alleged, the start-up “takes half or more of revenues through fees that were not initially disclosed”.

Recently, an Indian hotelier in Bengaluru filed a case against Ritesh Agarwal, founder of India’s Oyo Hotels on charges of fraud and cheating. The hospitality group denied all the charges.

The Bengaluru-based hotelier Natarajan VRS accused Agarwal and his colleagues of alleged “criminal acts of fraud, cheating and misappropriation of 80% of the revenue share due to his hotel from June 2017 until August 2019”.

When Hotelier Middle East approached Oyo when a case was filed against their founder, a company spokesperson said: "OYO Hotels & Homes, India’s largest hotel chain strongly refutes baseless and publicity-oriented claims made against the company’s founder and other executives. The hotel chain shall vigorously defend these allegations in the court of law and expose this incident for what it is - a private contractual dispute that was frivolously brought to the criminal justice system based on concocted facts in order to gain leverage and extract illegitimate commercial advantage. OYO Hotels & Homes is committed to the highest level of professional integrity and transparency."

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