Hospitality industry body FHRAI has called for the House of Commons Standing Committee on Finance to intervene to regulate online travel and food aggregators, alleging anti-competitive practices by tech platforms.
In a letter to Parliamentary Standing Committee on Finance Chairman Jayant Sinha, FHRAI said a handful of online travel aggregators (OTAs) as well as food service aggregators (FSAs) had created havoc.
The parliamentary panel is examining alleged illegal practices by big tech players and tech platforms that could negatively impact competition in the Indian market.
”The main reason for the committee’s intervention is the huge public/consumer interest in this issue. Customers face ongoing issues of non-compliance with prior commitments coupled with a nearly zero complaints redress mechanism from OTAs and FSAs,’ the Vice President of the Federation of Hotel Associations wrote and Restaurants of India (FHRAI), Gurbaxish Singh Kohli.
He further stated, “Due to the looting of commercial interests of hundreds of thousands of hotels and restaurants in the country, it is imperative to provide a mechanism of protection against predatory pricing and anti-competitive tactics adopted by OTAs. and FSAs”. It is also concerning that, thanks to international funding, ASPs and OTAs have a habit of attracting customers or diverting them to their forum, Kohli added.
According to the FHRAI, common problems with ASPs and OTAs stem from their inability to serve customers.
“Sometimes OTAs and FSAs show on their platforms that restaurants are not working and rooms are sold out, but in fact, they are unable to serve their customers, thus causing big problems for the customer and the service provider. ” It said.
Alleging hidden fees collected by OTAs and FSAs, the hospitality industry body said these platforms ‘often engage in double-charging by inflating the fees payable by consumers through levies’ under different names and pretexts, and that consumers are often confused to think that the same thing is charged by hotels and restaurants.” These fees include convenience fees, service fees and packaging fees which are not levied by the company, delivery charges, transaction fees to offset credit card commission, tips supposed to be paid to delivery people, and donations collected for different charities.
“None of these charges are levied by the hotel or restaurant and consumers are led to believe that the charges are levied by the hospitality industry,” he pointed out.
The hospitality industry therefore calls on the parliamentary standing committee on finance to take cognizance of the difficulties of the hospitality and catering industry being stifled by a few OTAs and FSAs, the letter states.
Highlighting that the hospitality industry is struggling to recover from the unprecedented losses it has suffered during the Covid period, the FHRAI said: “In these trying times when doing business is challenging, rules of the fair gaming and a conducive business environment are very crucial for the survival and revival of the sector in the country.” He added, “We strongly believe that your positive intervention through the regulation of FSAs and OTAs would ensure A level playing field and a competitive environment that benefits thousands of hotels and restaurants across the country. It would also greatly benefit millions of our customers with better deals and better customer experiences.” Seeking an opportunity to meet with the committee, FHRAI said it offered to share contributions to strengthen competition law to protect the interests of all stakeholders in green hospitality. ic -system.
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