The letter written by Ankit Agarwal, head of Oyo's procurement and supply chain states that the hospitality industry is critically dependant on people movement and interaction and the above actions have impacted the industry significantly.
ET has seen a copy of this letter. Oyo confirmed the development.
“Oyo does see challenges in the hospitality and travel industry in the near term. We, therefore, continue to over-communicate during this time with full transparency and have accounted for any possible anomalies that may arise. It is in this respect that we have reached out to our large vendors and partners as a matter of abundant precaution and notified that there may be possible disruptions in the payment cycle,” an Oyo spokesperson said.
“We have also indicated that should these anomalies occur, we will strive to resolve them at the earliest,” the spokesperson added.
Oyo also said the company has made an outreach to relevant ministries, state governments as well as local authorities to offer some of its properties for pay per use quarantine facilities at a reasonable and affordable price.
“In the current unprecedented situation and challenging circumstances there may be possible disruption in our payment cycles and we need your understanding and support to sail through this situation,” the letter from Agarwal stated.
But, unhappy owners are not convinced.
“Payments were anyway disrupted. Forget this calamity. They have not been regular and they give some reason or the other. My property has been given on a minimum guarantee basis and payments have been an issue. This is just a publicity stunt. How will they provide these services. They haven’t consulted hotel partners who own most of their hotels and their staff has already vacated properties,” said Dilip Datwani, an Oyo partner with a property located at Vile Parle in Mumbai, opposite the domestic airport.
An Oyo spokesperson said the company is keen to support the lodging requirements of travellers and tourists who are stranded as well as the hospital staff, air and sea crew through a combination of Oyo hotels and Oyo LIFE offerings.
Gurbaxish Singh Kohli, vice-president of Federation of Hotel and Restaurant Associations of India (FHRAI) said Oyo’s 'grand' announcement is ambiguous as it does not say exactly as to who will foot the bill.
"Would it be Oyo as a company or the owner of the property from whose rentals they will deduct the amount? It is reported that hotel owners have not been consulted before this announcement, leading us to suspect that this is just a publicity stunt," Kohli said.
"FHRAI and its regional bodies have already volunteered and offered in excess of 1000 rooms and our members are actively co ordinating with the government officials at the state, district and city levels," he added.
Oyo said in the US, the company has offered rooms across 300+ hotels for free to all medical professionals, including doctors, nurses and first-responders to ensure that they can take rest, shower or just get off their feet and recharge.
Hotel owner Harish, who has 15 hotels under Oyo in Bengaluru said he received a call from a company executive this week stating they would not able to provide the minimum guarantee fee for one of his properties.
“Our minimum guarantee fee is Rs 6.5 lakh. They have to pay that amount monthly regardless of the business. They told me they won't be able to pay me the agreed upon amount and that they will take the hotel on a commission basis now. I didn’t agree for that. I will decide on what needs to be done after our agreement ends,” he said.
Vikram Shetty, VP of the Pune Restaurant and Hotel Association and a former Oyo partner said small hotels will not be able to sustain their business.
"If Oyo wants to avoid payments this is a golden chance. A lot of hotel owners have taken loans. They should at least pay the amounts due for the month of March prior to the shutdowns," he added.
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2 Comments on this Story
Lakshit Soni305 days ago
They don't pay the payment even if it is a regular period they have all the herarchy where they have reasons not to pay money and now another excuse they have all the payments received in there Accounts as guest have paid and checked out of the hotel and now they will not disburse as they got a reason of corona virus . Worst company just filling there own pocket and leaving owner emptyy handed .. new formula to loot is to not settle the reconciliation for 6 months and make a one time settlement and saying we will only pay 50 percent amount or either we will not pay a single penny and the owner at the end has to say yes as he losses all the amount or gets atleast what they are paying . Even after that its been 5 months they are not able to pay the amount ... Hoteliers suffering in the hands of the yongest hotel chain OYO Rooms .... A advice to new hoteliers don't join they show you a preety pictures of revenue but do not give the results as your hotel booking can be shifted to any oyo property at last minute making your room empty and more over not paying you your hard earned money .....
Pankaj rai307 days ago
Oyo ne hotel.line ko barbad kar diya hai o kya kisi ki mhelp karega oyo sirf apne galtiyon ko chupane ke liye ye sab dhong kar raha hai oyo ne sabhi hotel walon ko barbad kar dita hai all over india oyo like corona for hotel in indiya