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Indian operators up in arms against OTA pricing policies
Rohit Kaul, New Delhi, June 28, 2016
 

MORE than 1,000 tour agents, transport operators and hoteliers held a protest late last week at Jantar Mantar in New Delhi against what they termed as “unethical pricing policy by OTAs”.

 

All major Indian travel trade associations in the country were represented, including Travel Agents Association of India, Travel Agents Federation of India, Association of Domestic Tour Operators of India and the Indian Tourist Transporters Association.

 

 

According to the protestors, Indian OTAs are misusing foreign direct investment to offer heavy discounts on the tariff of hotel rooms. They contend that this will in turn outprice smaller agencies and unfairly wipe them out of the market.

 

“This is not an issue of brick-and-mortar operators against OTAs. We understand that technology is good for the industry. We are just protesting against unethical business practices where they are using foreign funding to heavily subsidise products in such a way that small players can’t exist in the trade,” said Neeraj Rustagi, director, Regency Tours.

 

“Recently there was a flash sale on an OTA where they were offering a hotel room worth 4000 rupees (US$59) for as low as 125 rupees.”

 

Ctrip had invested US$180 million in MakeMyTrip earlier in January, while Naspers also recently injected US$250 million in the Ibibo Group, which runs Goibibo.com.

 

An agent who wished to remain anonymous said most Indian OTAs are reporting losses because of the heavy discounts they are offering. MakeMytrip in May reported a loss of US$49.9 million for its fiscal year, the company’s 14th straight loss making quarter.

 

“Such absurd discounts are also diluting the brand value of hotels. We want the government to streamline policy for e-commerce portals so that they can’t subsidise the product in order to remove the competition,” said Harjinder Singh, team leader, 24x7 Travels.

 

The protesters also shared that it will soon file a case at the Competition Council of India.

 
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