OYO- A Survivor or Threat

In the era of massive competition, companies are moving towards various unethical means for becoming trend setters resulting in fame for short period of time. Incase in gaining higher profits, they forget that things don't last longer, resulting of companies dropping and brand value or reputation decrease. More than 10000 hotels operators who partnered with Oyo Hotel And Homes are complaining about being the blindsided by Fees Increase. The hotels are facing crucial time with the emerging market unicorn valued at $10 billions.

Oyo Hotels and Homes, a Softbank backed startup, which has become one of the world's largest hotel chains with a simple promise of "hassle-free" online booking, transparent pricing and cheerful lodging. Softbank nearly invested around $1 billion in Oyo, though it's vision Fund and struggling to raise investment funds for the failed offerings of Office-rental company, WeWork. Investment done in Uber is turned out to be in profits whereas Oyo has not yet turned profit.  Oyo rooms brings up disruption both for the hotel owners as well as the middle class travellers at the poor economic growth rate. They tend to charge 20 per cent franchise fee on room revenue in the beginning but end up charging more revenue which were previously not disclosed.

Recently a complaint was lodged against Oyo in Bengaluru for withholding money using unfair fee increases. Similar case was filed by hotel owners of Karnataka accusing the founder and CEO  Ritesh Aggarwal as fraud. On the Appeal of stay order by Mr. Agarwal, police officials were barred from investigation whereas in Chikkamagaluru officials are still working to find the missing gaps.

The company denied all the allegations saying that it works with full transparency, integrity when it comes on working terms with its customers. Oyo says that it wont be possible for the company to retain 99 per cent of asset if its client were unhappy. The 45% stake holder of the Oyo ( Softbank ) refused to comment on this statement of Mr. Agarwal. The company exclaimed on their part that they have introduced platform fee and fee for a visibility boost which can be easily discovered in the monthly statements. In the past few years the 10 cities suggested that discontent has grown at higher pace. The business of small hotel owners is highly affected as condition of Oyo is getting worse day by day.

Numerous hotel operators revealed that reuters found all their properties  sold out even though rooms were available. In order to capture wider market share and increase its horizon,  Oyo signs up hotels as franchisees by rebranding them and demanding charges fee for upgradation in delhi. Oyo hotels are updated on new contract terms at the hotel that Oyo provides to manage bookings. Many owners believe that junior staff operate such app until the fee has been charged. Ashraf ali , a hotel owner in Mumbai said that notification of offering new terms stays until and unless hit by the employee. Many hotleliers our running on loss due to commissions charged by the Oyo.

As far as I am concerned, Oyo imposes heavy costs on hotel owners to work with it. They can not expect to reap through this Oyo technology platform and business model without being willing to bear the cost, but it's a matter of life and death for them in the case of small owners something that Oyo can afford to overlook, at least for the time being, with huge capital reserves.