Many of India’s leading luxury resorts have received notices from the Department of Consumer Affairs (DCA) for alleged non-fulfilment of services promised in premium membership plans.
The DCA has sent notices to several hospitality companies including those operating under the brand names Club Mahindra, Country Club and Park Holidays following thousands of complaints received on the National Consumer Helpline, said people with direct knowledge of the matter. While the consumer affairs ministry started the inquiry in 2022, notices were sent to these companies in the last two months, people cited above added.
The schemes under DCA’s radar are long-tenure membership plans offered by these platforms to their clients, promising them several facilities not offered under regular plans .
Several dissatisfied members had registered complaints with the department following which the regulator initiated what is called ‘class action’ against these companies. Based on its findings, the department can impose fines on the companies for violation of consumer rules. The department can also force them to change any policies that are found to be against the interests of consumers. When the ministry receives bulk complaints against an entity or a sector, it clubs the complaints and launches a broader probe, called 'class action'.
Emails sent to Club Mahindra, Country Club and Park Holidays remained unanswered.
“It has been observed these hospitality firms sometimes misrepresent facts, there are often hidden costs in the schemes. There is also false advertising that members can use their resorts anytime. Consumers have also complained that these resorts are sometimes booked for external events and hence members cannot avail accommodation,” said one of the persons mentioned above.
The department is also looking into the aspect of hidden costs in these membership plans. For instance, these plans often claim that their members will be eligible for a "totally free stay" in any of the resorts a few times a year.
“However, in most of the cases it has been observed the membership plan doesn’t cover expenses like food or transport. Most of these resorts are situated remotely and hence consumers have no option but to pay for the additional services and most of these services are also steeply priced,” the person cited added.
The development assumes significance as India’s luxury travel market has grown over the last few years and many people are signing up for the membership plans being offered by these firms.
These platforms charge anywhere between Rs 7 lakh and Rs 15 lakh for 25-year membership plans while the amount is Rs 3-6 lakh for shorter tenure plans of one to four years. Over and above this amount, the consumers are often required to pay a small annual membership fee.
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