The Federation of Hotel and Restaurant Associations of India (FHRAI) has sent a notice to online travel aggregators (OTA) MakeMyTrip and Goibibo for distorting the market price.

The association has also threatened a nationwide protest against OTA entities if they fail to resolve the issue through dialogue.

Hoteliers’ complaint

FHRAI has expressed concern over the demand for “exorbitant” commissions and hosting of “illegal and unlicensed” bed and breakfast (B&B) accommodations by OTAs.

“One of the biggest concerns is that after securing discounted rates from a hotel, the OTAs further discount it on their online platforms without the hotel’s consent. This damages the hotel’s reputation, and also distorts the market scenario,” said Gurbaxish Singh Kohli, Vice-President – FHRAI & President – Hotel and Restaurant Association of Western India.

Referring to the B&B, motels and similar accommodations hosted by the OTAs on their platforms, the Federation alleged that the OTAs were legitimising such unlicensed businesses by promoting them on their sites and apps while disrupting the business of organised hotels.

“The so-called B&Bs are operating without valid licences from local or state authorities. Since these operators do not have to pay for licences and the statutory fees, they are cheaper by default. Non-compliance of statutory rules and regulations compromises guest safety, which should be big concern for everyone involved,” SK Jaiswal, Vice-President (North), FHRAI, said in a statement.

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