Low Margins And Hidden Costs: Why Small Hotel Owners Are Feeling Cheated By OYO
- Hotel owners say OYO's arbitrary deductions have erased their margins
- Some of OYO's charges are not listed in their contract hoteliers allege
- Deductions to minimum earnings promised to hoteliers are fueling the discontent
When OYO first shifted to the hotel franchise business in 2015, it seemed like a great proposition for budget hotels. Struggling with lack of visibility and guidance on how to upgrade their properties, small hotel owners ticked along thanks to word-of-mouth referrals and an unorganised system of touts, tour operators and agents.
But lately things have taken a turn for the worse.
Protests have erupted around the country against the platform as its business model and the terms it signs with hotels have left many owners upset about dwindling margins and profits.
Independent protests by small hotel owners are springing up in mid-tier towns like Nashik, Pune, Kota, Manali, Jaipur and Ahmedabad as well as Bengaluru and Delhi. Hoteliers claim that OYO has been cheating them of their promised returns and minimum guarantees by levying a slew of charges, often without informing them. Many of these charges are not specified in the contract between the owner and OYO, hotel owners that Inc42 spoke to, alleged.
