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CCI will act in favour of hoteliers against the predatory discounting practice followed by OTAs: Nirav Gandhi Akshay Nayak Ahmedabad IN THE RECENT past, many articles surfaced covering the ongoing tussle between hotels and OTAs, claiming the latter's predatory discount on room tariffs which has been hurting the industry at the national level. Relieving the members of the fraternity with some positive news in favour of the industry, Nirav Gandhi, jt hon secretary, HRAWI and executive committee, FHRAI, at the recently concluded Express Food & Hospitality's Atithi Devo Bhava Ahmedabad said, “We have taken up the matter of deep discounting by OTAs with the Competition Commission of India (CCI) and it is going to go on and we will win. Unfortunately, the government ignored the fact for so many years. Although the
tradition of Atithi Devo Bhava is centuries old, the OTAs are disrupting the way hotels have been traditionally functioning and the warm culture that we disseminate.” Although digital platforms have been contagious and more and more people are getting benefited by the ease that it offers, OTAs shall not take the hotels for granted, just like e-commerce has done to retail chains by attracting traffic through deep discounts that make them rethink upon their purchase decisions, the traditional way, informed Gandhi. “We stand here to avoid or stop this disruption,” he reiterated. Mentioning about how the functioning of OTAs has negatively impacted the hotel industry, especially the standalone hotel business, Gandhi said, “The biggest challenge in the OTA business with hotels is the
Nirav Gandhi
commissions. The disparity in the rates charged to hoteliers was set to suit their convenience, irrespective of what rates the hoteliers are charging to the consumers. This has added an unfair burden on us hoteliers. It was seen as a trend that some of
the hotels were listing room tariffs on their websites lesser than those listed on the OTA websites. Our fellow hoteliers need to know that we have the inventories of rooms and the OTAs are dependent on it. So they will try to threaten to stop business if we play with the rates, but in the end, they will have to agree. They are not in any position to dictate terms where the rate of your inventories is concerned.” Decoding about the issues taken up with CCI, he explained, “The few problems that we have taken up with the OTAs are the unfair and unbiased listings as per their convenience and not the consumers' convenience. If you see, there would be the first 20 listings that a consumer doesn't want, and despite the filters added, it still doesn't give them what they want. The CCI has taken this issue up. The commis-
sion has given an order against their predatory pricing on rooms too. A lot of hotels have resisted the predatory discounting practice, and now they have grown in ARRs very well. The independent hotel business, over 80 per cent in India, still suffers due to predatory pricing by the OTAs. Furthermore, the OTAs, most of the times, completely change the views of the consumer about a hotel by categorising it in a 4-star or another category while the hotel is actually not operating in that category. Category approvals are only looked by the government, and hence the commission is also probing this issue with the OTAs. Also, out of 50,000 hotels that they have listed, 40,000 hotels were charged with a service charge. So actually the consumer is paying 17-22 per cent of the room tariff to the OTAs.”
'BIRYANI BYKILO WILLHAVE 250+ OUTLETS TILL2025' A diehard foodie with vast entrepreneurial and scaling up expertise, Vishal Jindal, director and co-founder, Biryani by Kilo, speaks to Steena Joy about the unique concept and how the brand is going places What is the BBK pipeline to 2025? How many outlets will you open? Biryani by Kilo will have 250+ outlets till 2025, including at least 50 international locations. With 250+ outlets BBK will have Rs. 800 - 1000 Cr. topline with healthy EBITDA. How will you fund BBK's expansion plan? We are looking to raise Series B Fund around USD 15-20 Million by mid 2020 which
should be sufficient till 2025 as BBK is quite capital efficient.
lion market and this will grow by at least 20 per cent a year.
having great potential in growth & generating jobs.
Your insights on India's foodservice segment? How has it evolved and where is it headed? India's food service segment has seen a continuous increase in the number of orders across all metros & Tier I, II cities. From less than 0.8 orders a month in 2013 it has gone up to two orders a month in 2018-19 which has made it a US$ 70 bil-
India needs a separate ministry for the F&B segment. Do you agree/disagree? Agree. F&B industry is currently at US$ 70 billion and growing by 20 per cent+ CAGR. With factors such as urbanisation, rising income levels and improved investment climate, the foodservice sector has a huge opportunity. F&B segment has also been identified as
Any new product diversifications being planned for BBK? The Biryani and kebab category is huge in India and worldwide. BBK plans to be pan India and worldwide leader in these categories mainly.
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Vishal Jindal
Sustainable initiatives in the BBK kitchens? To support the environment, BBK uses the earthen
Handis to cook. All our packagings are bio-degradable and environmentally friendly.
