MakeMyTrip, the country’s biggest online travel aggregator (OTA), plans to opt out of the government scheme on accreditation of OTAs and bed-and-breakfast establishments, stating that it is a technology platform which cannot be assessed for the quality of service of inventory offered on the portal.
The tourism ministry had in December issued a set of voluntary guidelines for OTAs and bed-and-breakfast establishments, including homestay operators, to ensure adequate safeguards against deficiency of service. The guidelines also seek to ensure alternative arrangements for customers if needed and punitive deterrence for OTAs.
Sources in the tourism ministry said MakeMyTrip (MMT) CEO Deep Kalra has communicated to ministry officials that his company would not like to be a part of the scheme for now.
“MMT has not sent a letter but group CEO Deep Kalra has communicated this to us,” said an official familiar with the matter. “They have said right now they will not be able to do so. Their definition is that they are a technology platform. They are not responsible for the service delivery.”
MakeMyTrip did not respond to an email seeking comment till press time Thursday.
The official quoted above added that entities are expected to submit online applications for the scheme and that the process will take a month.
While releasing the guidelines, the ministry had said there are several players in the OTA segment who are operating without any accreditation and validation.
“One of the risks of letting the market operate unhindered is that unscrupulous players can vitiate the entire market through unethical trade practices,” the ministry had said. “It is imperative that a system is put in place with qualitative benchmarks to accredit them. The paramount concern would be the assurance of quality of service delivery for the customer by the OTA.”
Officials said the ministry has kept pricing and commercial agreements out of the ambit for accreditation and that they are solely to do with quality standards for listed inventory on OTA platforms.
“Accreditation by itself does not impinge on the other issues that are being raised and is only about quality standards. When you assure a certain thing, you should be liable for the quality, which means you should have gone and inspected the places that you sell. Some portals are willing to come on board but some have a lot of inventory without verifying the quality. MakeMyTrip seems to be one of them,” the official added.
In March 2017, MakeMyTrip said it was launching a new concept called Assured Hotels wherein it plans to categorise and certify certain hotels based on parameters like quality of reviews and service. The hotels which get a quality assurance from the company would largely be across three,-four-and five-star categories.
The move was initially expected to cover 5,500 hotels.
But sources said while the company tried to do that with its newer inventory, it has a lot of legacy data and listings that have not been verified and opting for accreditation could mean jettisoning that inventory.
Revenues from hotels and packages were the biggest contributor to MakeMyTrip’s overall revenue in the third quarter of 2018-19, rising 26% to $95.45 million from $83.86 million a year ago. The company reported revenues of $179.9 million and a narrower loss for the quarter, attributing it to growth in its main business verticals.
The government, while releasing t he guidelines, had said the recognition as an approved OTA shall be granted by the tourism ministry for five years, based on the inspection report and recommendations of a committee comprising the concerned regional director (RD), a representative each from the Federation of Hotels and Restaurant Association of India (FHRAI) and the Indian Association of Tour Operators (IATO) and upon getting the approval of the chairman of the government-run Hotel & Restaurant Approval and Classification Committee (HRACC).
MMT has been facing the ire of apex industry body FHRAI, also a part of the accreditation committee, which has alleged that the company’s business practices are exploitative, unethical and divisive and lead to predatory pricing and other market distortions that had the potential to harm both hoteliers and consumers in the long term.
Industry associations have approached the tourism ministry on the matter but the ministry has maintained that it has no locus standi on the issue and that associations and hoteliers should approach bodies like the Competition Commission of India.
“We have released the guidelines and they are not to do with pricing. The states are working to harmonise their existing frameworks with these and bring these into play,” said an official.
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