India's Oyo Hotels and Homes shot out of nowhere to become one of the world...
BENGALURU - India’s Oyo Hotels and Homes shot out of nowhere to become one of the world’s largest hotel chains with a simple promise of “hassle-free” online booking, transparent pricing and cheerful lodging.
Softbank, which has invested nearly $1 billion in Oyo, through its Vision Fund, is struggling to raise funding for a second investment fund in the wake of the failed offering of office-rental company WeWork and amid questions about the path to profitability of other marquee investments like Uber .. Oyo has not yet turned a profit.
Two hoteliers in the southern state of Karnataka filed separate police complaints last month accusing Oyo of deceitfully increasing commissions, and accusing Oyo’s 25-year-old founder and CEO Ritesh Agarwal of fraud. Agarwal said hotel operators who have raised complaints represent a tiny fraction of Oyo’s network and were seeking to drive prices higher at the expense of consumers.
Reuters interviews with 22 hotel owners and managers who run hotels under the Oyo brand in 10 Indian cities suggest the discontent has grown since late last year. Three hotel operators in Ahmedabad said they had e-mailed Oyo representatives on Sept. 23, asking to be removed from the platform but received no response. Reuters found all their properties still listed on Oyo’s app with “sold out” messages even though the hotels had rooms available.
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