The ongoing conflict between Hotel Associations and Food Service Aggregators (FSAs) has reached Telangana. In line with New Delhi and Karnataka, Hoteliers, are on the verge of revoking their contracts or at least review schemes of the FSAs, over alleged unethical practices, like high commission rates driving hotels to loss.
The Telangana Hotel Association (THA) comprising of 2000 premium hoteliers have pointed out the unreasonably high commissions, payment terms and alleged arbitrarily applied additional charges as well as unethical practices by the FSAs, they said. The body will be issuing a formal statement about their stand on Tuesday evening.
Mr Sampath T, General Secretary, TSHA explained, “This is a classic example to illustrate how aggregators are exploiting norms. A hotelier at Kukatpally was charged Rs 10 because the management did not accept the order in the time frame of 2 minutes. Besides this, there is a divide and rule in the FSAs, charging commissions on each order. Hotels who 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”.
The Irani Chai hotels association and Biryani centre have also joined hands with TSHA to take on aggregators.
“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 are looking to review their contracts”, added S. Venkat Reddy, member, TSHA.
The food industry has complained of the 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 a start-up but it should be a win-win situation for both. But we have been bleeding in business since these contracts were signed”, said Naga Raju, member, TSHA.