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Hospitality company OYO, having established a presence in over 10,000 cities with around 159,000 properties in 35 countries, as of of Economic Times Over 5 lakh nights booked by people with Oyo for New years celebrations: CEO Read more  December 2021, now has a renewed focus. It is making a conscious effort to be hospitable… to its partner hotel owners, or patrons, as it likes to call them.

It’s not an easy feat as OYO has a long history of disgruntled patrons.

Take Varun*, for example. A property owner in Bengaluru, Varun worked with OYO for ten months until 2019—when OYO withheld lakhs of his earnings for reasons he insists were beyond his control. He reached out to owners with similar complaints online, and together, they claim to have filed a case that’s still in court—one of many many Business Insider India Dues, death and an investigation — all that went wrong with OYO hotels in the last 6 months Read more  such cases. Meanwhile, Varun switched to competitor FabHotels.

As of last month—three years after Varun left OYO behind—the company reached out with a settlement offer. As part of the settlement, Varun might actually find himself working with OYO again. The company has also reassured him that things have improved significantly since they last worked together.

But Varun is just one patron. Two hotel owners The Ken spoke with said that OYO’s commission rates were high and would invariably double in the name of value-added services. That OYO also withheld its dues by levying unreasonable penalties for late check-ins and for breach of contract when they tried to exit the partnership.

A hotel owner who has been with OYO for two years in Guwahati said that the company charges 29% fixed commission. But it adds multiple hidden charges that take the overall payout after GST to about 50-55%, he claimed.

Fractured relationships with patrons have been a constant for OYO since 2017-18. This was when the company adopted a “growth at any cost” mindset, with domestic expansion and opening new international markets markets Economic Times Oyo expands international presence, enters Sri Lanka Read more  like China, UK, and UAE, according to an employee. OYO further aggravated patrons—primarily small and medium businesses (SMBs)—when it invoked the force-majeure clause during the pandemic to alter existing contracts.

AUTHOR

Aayush Agarwal

Aayush covers businesses that are primarily Internet for The Ken. In his previous stint at Goldman Sachs, he spent slightly more than a year analysing investment opportunities in the China Internet space. A science graduate, he completed his postgraduate from the Indian Institute of Management, Kozhikode. Write to him if, among other things, you wish to talk about e-businesses, journalism or just offbeat career choices.

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