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Hotel startups move away from aggregation model

Fab Hotels, which has 100 hotels under its franchisee, experimented with the aggregation model and decided to discontinue it. “The variation of service is higher in budget hotels.
As a brand, you need to bring it down. But in aggregation, you have little control on these. As an aggregator, you do not add much value. The interests of an aggregator having partial inventory in a hotel and the interests of the hotel owner are usually not aligned. There is disparity in pricing and there is some cannibalisation of the overall business due to higher discounts by the aggregator,” said Adarsh Manpuria, co-founder of Fab Hotels.

 Prafulla Mathur, founder and CEO of WudStay, echoes Manpuria’s views. WudStay started as an aggregator, like OYO, but is now converting these hotels to branded franchisee. “We are converting aggregated properties to full franchisees. Last year, online travel agents (like MakeMyTrip) had delisted us as we had a partial inventory in some hotels which they also had separately listed on their platform. Now, we are back with them,” said Mathur. About 50 of the 650 hotels with which it works have been turned into franchisees. Treebo, another start-up in this space, never opted for aggregation and grew on a brand driven model.