Hyderabad: Hoteliers in Vijayawada have unanimously agreed to cancel business ties with food-service aggregator (FSA) Swiggy from November 11 onwards. The hoteliers, under the umbrella of Andhra Pradesh Hotel Association, cut ties with the aggregator over unreasonable discounts offered to customers, they alleged.
Meanwhile, few hotels have also suspended its current policy ties with its business partners (restaurants/ hotels) beginning from November 6. 'No Swiggy in Vijayawada from November 11th onwards, said Hoteliers.
In an official communication, the hoteliers said, “We decided to roll out our policy signed with Swiggy over unreasonable discounts offered by the latter, leaving many hoteliers in a loss. From November 11, we are suspending the policy with the food-service aggregator.”
The hotel association pointed out the unreasonably high commissions, payment terms and arbitrarily applied additional charges as well as unethical practices by the FSAs. The association said, “This is a classic example to illustrate how aggregators are exploiting the norms. A hotelier in Vijayawada was charged Rs 10 because the management did not accept the order in two minutes. Besides, there is a divide and rule in FSAs charging commissions on each order. Hotels that have recently joined hands with aggregators are charged a hefty 20-22 per cent plus taxes. The business model of hoteliers will die soon if we don’t revoke such contracts.”
They added, “Once habituated, customers will begin demanding the same discount from hotels, and if turned down, hotels are most likely to lose customers besides facing the blame for bad service. A majority of hotels are unhappy and to review their contracts. In order to save our business, we have barred the service, No Swiggy in Vijayawada.
The food industry has complained of FSAs being exploitative and having a dominant behaviour. Their payment terms are not adhered to and are easily violated for the slightest excuse without recourse to any easy dispute resolution. “We (hoteliers) are in favour of start-ups, but it should be a win-win for everyone. However, our business has been bleeding since these contracts were signed,” said a member of the AP Hotel Association.