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CCI will act in favour of hoteliers against the predatory discounting practice followed by OTAs: Nirav Gandhi

Akshay Nayak

In the recent past, many articles surfaced covering the ongoing tussle between hotels and OTAs, claiming the latter’s predatory discount on room tariffs which has been hurting the industry at the national level. Relieving the members of the fraternity with some positive news in favour of the industry, Nirav Gandhi, jt hon secretary, HRAWI and executive committee, FHRAI, at the recently concluded Express Food & Hospitality’s Atithi Devo Bhava Ahmedabad said, “We have taken up the matter of deep discounting by OTAs with the Competition Commission of India (CCI) and it is going to go on and we will win. Unfortunately, the government ignored the fact for so many years. Although the tradition of Atithi Devo Bhava is centuries old, the OTAs are disrupting the way hotels have been traditionally functioning and the warm culture that we disseminate.”
Although digital platforms have been contagious and more and more people are getting benefited by the ease that it offers, OTAs shall not take the hotels for granted, just like e-commerce has done to retail chains by attracting traffic through deep discounts that make them rethink upon their purchase decisions, the traditional way, informed Gandhi. “We stand here to avoid or stop this disruption,” he reiterated. Mentioning about how the functioning of OTAs has negatively impacted the hotel industry, especially the standalone hotel business, Gandhi said, “The biggest challenge in the OTA business with hotels is the commissions. The disparity in the rates charged to hoteliers was set to suit their convenience, irrespective of what rates the hoteliers are charging to the consumers. This has added an unfair burden on us hoteliers. It was seen as a trend that some of the hotels were listing room tariffs on their websites lesser than those listed on the OTA websites. Our fellow hoteliers need to know that we have the inventories of rooms and the OTAs are dependent on it. So they will try to threaten to stop business if we play with the rates, but in the end, they will have to agree. They are not in any position to dictate terms where the rate of your inventories is concerned.”
Decoding about the issues taken up with CCI, he explained, “The few problems that we have taken up with the OTAs are the unfair and unbiased listings as per their convenience and not the consumers’ convenience. If you see, there would be the first 20 listings that a consumer doesn’t want, and despite the filters added, it still doesn’t give them what they want. The CCI has taken this issue up. The commission has given an order against their predatory pricing on rooms too. A lot of hotels have resisted the predatory discounting practice, and now they have grown in ARRs very well. The independent hotel business, over 80 per cent in India, still suffers due to predatory pricing by the OTAs. Furthermore, the OTAs, most of the times, completely change the views of the consumer about a hotel by categorising it in a 4-star or another category while the hotel is actually not operating in that category. Category approvals are only looked by the government, and hence the commission is also probing this issue with the OTAs. Also, out of 50,000 hotels that they have listed, 40,000 hotels were charged with a service charge. So actually the consumer is paying 17-22 per cent of the room tariff to the OTAs.”

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