The Federation of Hotel & Restaurant Associations of India (FHRAI) has now warned of action against room aggregator OYO for large-scale breach of contracts, jeopardising the safety of consumers and violation of laws. The move comes a week after the apex body issued a notice to online travel aggregators (OTAs) - MakeMyTrip and Goibibo - for amicably solving pricing related issues with its member hotels/ associations.

In its letter on Monday, FHRAI told OYO that it is endorsing illegal and unlicensed bed and breakfast (B&B) apartments, flats in residential and commercial buildings, rooms in chawls and such other independent structures as hotels.

Gurbaxish Singh Kohli, vice president – FHRAI and president – Hotel and Restaurant Association of Western India (HRAWI), said, such positioning of hotels is tantamount to misleading the guests. "When a guest books in a hotel they expect to stay in a hotel and not in an apartment or a residential premise. This not only harms the reputation of hotels in India but also constitutes a potential safety hazard for the guest," he said.