MakeMyTrip, GoIbibo adopting predatory pricing? Stop illegal discounts, hoteliers warn
The Federation of Hotel and Restaurant Associations of India (FHRAI) on Wednesday accused two major online travel aggregators (OTA) of allegedly offering illegal discounts that are harmful to hoteliers and customers.
Following many complaints from its members, the FHRAI has alleged that MakeMyTrip and GoIbibo managements were adopting unethical and exploitative business practices, divisive-led predatory pricing and other market distortions.
"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," said FHRAI Vice President and Hotel and Restaurant Association of India Western India President G.S. Kohli.
Accusing the OTAs of `market cannibalization`, 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 percent, adversely hitting the revenues, business and livelihood of the hotel industry, he added.
Besides these high commissions charges to the hotels, the OTAs offer big discounts from their own end, rendering the hotels helpless and compelled to conduct business in a self-defeating atmosphere.
"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," said FHRAI Joint Secretary Venkada Subbu.
Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.
RECOMMENDED STORIES
Power of Compounding: How many years will it take to reach Rs 3 crore corpus if your monthly SIP is Rs 4,000, Rs 5,000, or Rs 6,000
Power of Compounding: Salary Rs 25,000 per month; is it possible to create over Rs 2.60 crore corpus; understand it through calculations
Reduce Home Loan EMI vs Reduce Tenure: Rs 75 lakh, 25-year loan; which option can save Rs 25 lakh and 64 months and how? Know here
Top 7 Large and Mid Cap Mutual Funds with Best SIP Returns in 5 Years: No. 1 fund has turned Rs 15,000 monthly SIP investment into Rs 20,54,384; know about others
New Year Pick by Anil Singhvi: This smallcap stock can offer up to 75% return in long term - Check targets
PSU Oil Stocks: Here's what brokerage suggests on these 2 largecap, 1 midcap scrips - Buy, Sell or Hold?
08:22 PM IST