Bad Times for OYO May Pick up its Threads from Last Year

Hyderabad-based hospitality firm Conclave Infratech has filed a bankruptcy application against the hospitality unicorn

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Gurugram-based hospitality unicorn OYO Hotels & Homes has been going through a tricky time since the second half of 2019 when several reports of unpaid dues to hoteliers, police complaints and protests against the company came to vanguard. 2020 too seems to be rough on the company as latest media reports bared that Hyderabad-based hospitality firm Conclave Infratech which owns the Conclave hotel as it has filed an insolvency application against the unicorn’s parent company Oravel Stays Pvt. Ltd.


Right after the 26-year-old Founder, Ritesh Agarwal was named as the second-youngest billionaire in the world; reports unveiled that Conclave Infratech has filed a complaint against the giant to the National Company Law Tribunal’s Ahmadabad chapter accusing OYO for breaching its revenue clause.

Related Story: Here's Why This Hospitality Unicorn is Scaling Back And Laying Off Employees 

Alleged Breach of Revenue Clause

According to reports, the term of agreement signed between Conclave and OYO states that the corporate debtor, Oravel will have to pay the corporate creditor, Conclave, an assured benchmark revenue, which is a minimum business guarantee of INR 12,96,000 every month irrespective of bookings. 

Conclave has however claimed in its application that there has been no repayment of the unpaid operational debt by Oravel.

In response to Entrepreneur India’s query, OYO spokesperson said that the company has disputed the liability.  

"OYO continuously engages with all its vendors, towards resolving any issues and is committed to ensuring the best outcomes. Unfortunately, in this situation, the partner chose to disengage and pursue the matter in the said forum which also as per established judicial precedence isn’t maintainable given this is a disputed matter. OYO has disputed the liability and this being a corporate commercial dispute, the petition itself before the NCLT, is not maintainable,” OYO spokesperson said in a statement.

OYO on Shaky Grounds

The hospitality unicorn has been infamously making the headlines after hotel association and hoteliers have been raising their voices against the company and its founder Ritesh Agarwal since September alleging that the company has been cheating and has been using unfair business practices. 

In September 2019, reports revealed that, Bengaluru-based Bruhat Bangalore Hotels Association had reached out to police commissioner seeking an against the hospitality unicorn, accusing it for its unfair business practices. Following this in November, Roxel Inn owner Betz Fernandez has sued Agarwal and six others alleging that, OYO Hotels & Homes, didn't pay rent for the rooms for the last five months. 

According to the hotel owner, OYO booked rooms at the inn and had mutually agreed to pay a rent of INR 5 Lakh every month for the rooms. However, Fernandez complained that OYO has not given the rent since May. 

Last month, the hospitality giant also reported a widened global net loss percentage from 25 per cent in FY18 to 35 per cent of revenue in FY19 to $335 million.