Local hoteliers plan to boycott online booking portals and room aggregators this Diwali, if they do not amend their commission policy and other business practices, which have practices have rendered business of hoteliers unviable and so they are considering an option but to disengage them during upcoming festive season.
A meeting of hoteliers across Gujarat was recently held in Ahmedabad. They discussed the impact of prices practices of portals and room aggregators, which is now resulting in financial loss to them. They are now considering boycotting such companies during upcoming Diwali.
"Earlier, they had discounts of just 10 per cent on room bookings. This was increased to 15 per cent and kept on increasing at regular intervals. Now in many cases it is as high as 35-40 per cent. At such high commission, there is not much left for hoteliers who have made huge investments," said Narendra Somani, president of Hotel and Restaurant Association – Gujarat (HRA – Gujarat).
Well-placed sources in the hotel sector said lack of unity within hospitality fraternity and over inventory in local market are responsible for things to escalate to this level. "These portals create internal competition among hoteliers to fetch heavy commission. Since hoteliers want more business, they also fall prey to such practices," said a prominent hotelier. Moreover, Ahmedabad alone has an inventory of close to 11,000 rooms against a demand of about 5,500 room. It is mostly during Vibrant Gujarat Summits and other industrial expos, that hotels witness heavy bookings. The period of November to March of next year is the peak season for hoteliers, having a lion's share of annual income.
Budget hotels are the hardest hit as their room fares are lower. Hefty commission by booking portals not only erodes their profitability, it also makes a loss making proposition.
Aaditya Raja, owner of Hotel Aaditya in Sasan Gir said said that earlier he had to pay about 20 per cent commission but online booking portals and aggregators started adding various expenses and the commission shot up to about 40 per cent. "They also abruptly reduce the fair, which can potentially bring down fairs across the board, which hurts the industry. While they are not supposed to reduce fares beyond certain extent, such things happen. There are disputes on menu as well. The fare may not include unlimited breakfast, but we have to provide it," said Raja.
Hoteliers also end up losing when a booking is cancelled. In order to raise their problems collectively, hoteliers are now teaming up to demand a fair fare game.
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