The Pearl is hardly the most impressive of hotels. Situated in the grimy, backpacker-infested bylanes of Paharganj, New Delhi, it is a far cry from its namesake. Earlier this year, however, it became a rallying point for hoteliers in the area who were frustrated with budget hotel aggregator OYO.
On the morning of 31 July, close to 100 hoteliers gathered at The Pearl and dumped the tablet devices OYO had provided them to manage bookings. In less than an hour, a stack of tablets had piled up, submitted to protest OYO’s alleged non-cooperation in paying hotels their due.
The protest lasted 20 days. Each day saw aggrieved hotel owners gather, discuss their concerns, shout slogans and, perhaps most crucially, collect evidence against the target of their ire. Eventually, OYO went to court, and hoteliers were barred from banning or boycotting OYO.
The Paharganj hoteliers were hardly outliers. In November 2018, something similar happened in Ahmedabad, Gujarat. In that case, however, hotel owners were upset with online travel agents (OTAs) MakeMyTrip (MMT) and Goibibo. While discontent against these hotel and travel platforms was bubbling to the surface across the country, the Ahmedabad protests were notable for how vocal they were.
Since then, hotel associations have been a busy lot. They have approached the tourism ministry, the Competition Commission of India (CCI), and even the commerce ministry for succour. These efforts finally bore fruit on 29 October, when the CCI passed an order observing that there was a “prima facie case for investigation” into both platforms—MMT and OYO—for anti-competitive practices. This came in response to a complaint from the Federation of Hotel and Restaurant Associations of India (FHRAI).
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Though FHRAI made allegations ranging from exorbitant commissions to predatory pricing, the CCI’s order is primarily on account of an alleged agreement between OYO and MMT. One which excludes some of the former’s rivals like Treebo and FabHotels from MMT’s platform. This potentially contravenes the provisions of the Competition Act, 2002.
Still only tentative at best—CCI has directed its director-general to probe the allegations and submit a report within 150 days—the order was a marked change in position for the competition regulator. It has shied away from entertaining complaints against e-commerce companies in the past. With former IAS officer Ashok Kumar Gupta taking over as the new chairperson of the CCI late last year, however, the regulator seems to be changing its stance.
