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​Online travel agencies have just mass blocked Oyo Rooms and Zo. Here’s why

​Online travel agencies have just mass blocked Oyo Rooms and Zo. Here’s why

Ever since OYO Rooms and Zo Rooms made its foray in India’s holiday map, things seem disrupted for online travel agencies including MakeMyTrip, Goibibo and Yatra. With incredible schemes on offer, OYO and Zo were hitting a new low in hotel prices.

However things didn’t go as expected. Feeling jittery on the advancement of these budget-hotel aggregators, the online travel agencies have decided to jointly block them, a news report in The Economic Times has confirmed.

"MakeMyTrip has temporarily de-listed OYO Rooms from its platform. Zo Rooms is also getting delisted... and will be off from listings by tomorrow (Wednesday)," a MakeMyTrip spokesperson told the ET.

Defeated but not destroyed, Kavikrut, chief growth officer at OYO Rooms, said the ET, " Online travel agencies have been a longstanding business channel for us, but in current scenario it contributes to less than 10% of business.”

"There will be a small dip in bookings, but our growth from our app and other associations will more than make up for it," he added. "This transition is not a shock for us," Paavan Nanda, cofounder at Zo Rooms told the ET. "Our growth is mostly driven by our app and website."

At a time when OYO Rooms and Zo Rooms are readying more rounds of funding, this move might be discouraging for the hotel aggregators. On the other hand, hotels are a place where the online agencies earn the most. Rivals Oyo and Zo taking a toll on their business would never be tolerated.

"This is a clear move to prevent further erosion of market share. Hotels have the maximum margins for online travel agencies and given that these portals (like OYO and Zo) are selling standardised rooms at a much lower cost, it immediately marks a threat," an investor in the budget-hotel aggregation sector on the condition of anonymity told the ET.

OYO Rooms has expanded its network from 12,000 rooms across 1,200 properties in 73 cities to 30,000 rooms in over 3,000 properties in 135 destinations in India, as per thee ET report. Zo Rooms has aggressively expanded its network to 11,000 rooms in 1,000 hotels across more than 50 cities and towns in India.
Both the aggregators have been standardising service levels of small hotels. Taking into the fold, small unbranded hotels, the aggregators have been assuring owners a lump some profit.


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