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MakeMyTrip and Goibibo losing business due to dispute over commission, discounts

Around 270 hoteliers in the city has stopped taking bookings from two major online travel portals - MakeMyTrip and Goibibo - alleging heavy commission and indiscriminate discounts offered by these platforms on room tariffs.

The decision to boycott the online booking platforms over the commission and indiscriminate discounts were taken at a meeting of Gujarat chapter of the Hotels and Restaurants Association (HRA) last week. "As decided, around 270 hotels in the city have stopped entertaining customers who had booked their rooms through these two portals," Abhijeet Deshmukh, spokesperson, HRA - Gujarat, said, adding the boycott came into effect from December 1.

He said that hotels in other cities in the state may also follow suit in the coming days. "There was a time when online booking portals used to charge only 15 to 18 per cent as commission. Now, these two portals are charging 40 to 45 per cent. Further, indiscriminate discounts offered by them on room tariffs is also a major threat to our business these days" said Deshmukh.

Hoteliers are now worried about their survival as they are heavily dependent on these portals for business, he added. When contacted, a Goibibo spokesperson said it's business as usual for the company.

"As always, all booking on our platform are being serviced without any hassle to the customer. We continue to operate our business as usual," the spokesperson said. A response to the query sent to MakeMyTrip was awaited. Deshmukh claimed as much as 50 to 55 per cent business comes from these portals at present, which is expected to go up to 70 per cent in the future.

"In such situation, we will be dependent on these portals only. A day will come when hotels will have to either accept each and every condition of these portals or shut their business," he said.

He alleged that the issues of high commission and indiscriminate discounting are with these two portals only. Deshmukh, who also owns a hotel chain, said that if the present practice continues, many hotels will go out of business, as the hefty commission would eat up a major chunk of their revenue. He said due to the discounts these portals offer to customers, offline business is getting adversely affected, as walk-in customers complained that online platforms are offering the same rooms at a much cheaper rate.

"Our demand is that the commission should be kept at 15 per cent. The discount should be zero. Portals can not dictate terms to us. With these demands, 270 hotels in Ahmedabad have stopped taking bookings from these two portals since December 1," said Deshmukh.

With this decision, customers who had booked a room in the city through these portals, will not be entertained at the hotel, he said, adding that the hotels will ask the customer to cancel the booking first.

"After he cancels his online booking, we will offer the room at the same rate that was offered by the portals. Our protest will not cause any inconvenience to customers. But, it will surely spread the word," he said. Deshmukh added that around 550 hotels in Ahmedabad are listed on MakeMyTrip and Goibibo. Out of these, 270 hotels, having room tariffs ranging from Rs 1,000 to Rs 4,000, have decided to open its front against the portals.

"Our association has decided to start the boycott from Ahmedabad. Later, hotels in other cities will follow soon. In Maharashtra too, hoteliers have threatened to walk on the same path if the issue is not resolved," he added.

(With inputs from agencies.)



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