Why Bengaluru hotels are threatening to boycott Swiggy, Zomato

Bengaluru's hospitality industry is on the verge of a standoff with online food delivery platforms Swiggy and Zomato, and at the heart of it is a simple grievance: hoteliers say they're losing money and losing visibility into where that money goes.

And they are threatening to boycott Swiggy and Zomato from August 15 if they don't mend their ways.

What hotel association said

A coalition of major hospitality bodies — the Bangalore Hotel Association (BHA), Karnataka State Hotel Association (KSHA), National Restaurant Association of India (NRAI), Karnataka Bakery Sweets Association (KBSA), and several Bar and Restaurant Associations — has unanimously decided to pull the plug on Swiggy from August 15 unless the platform addresses a set of billing and transparency issues that hoteliers say have piled up over years.

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Speaking to The Federal Karnataka, PC Rao, honorary president of the Bangalore Hotel Association, said the decision follows repeated attempts at dialogue that failed to produce any lasting fix.

At the centre of the dispute is advertising. Hoteliers allege that Swiggy runs promotional campaigns — CPC (cost-per-click), CPA (cost-per-acquisition), and Promoted Ads — without getting explicit sign-off from restaurant owners first. The costs, they say, are simply deducted from their accounts afterwards.

Their fix is straightforward: a one-click way to opt out of advertising at any time, with no penalties or leftover charges once it's switched off.

Swiggy’s service fees

Beyond advertising, hoteliers say Swiggy's payment statements don't break down deductions clearly enough — GST, ad spend, discounts, and promotional fees are bundled in a way that makes it hard to reconcile transactions or run accurate audits. They want every deduction itemised separately.

Adding to the frustration is an allegation that Swiggy charges service fees on top of GST that's already been collected from customers and paid to the government — effectively a tax on a tax, with the added cost passed on to restaurants.

The most consequential claim is financial: hoteliers say that after all deductions and what they call accounting discrepancies, less than 50 per cent of what a customer actually pays ends up with the restaurant. Small and mid-sized outlets, the associations say, are hit hardest.

August 15 deadline

The associations say they've raised these concerns with Swiggy repeatedly, only to be met with promises that didn't translate into change on the ground. The August 15 deadline is being framed as a last chance — one final round of negotiations to fix both the ongoing issues and retroactively correct past billing errors.

He alleged that in some cases, restaurants received only Rs 40,000-Rs 50,000 against payouts of Rs one lakh and said the association had repeatedly raised the issue with the company.

If nothing changes by then, member hotels across Bengaluru say they'll stop taking Swiggy orders altogether. Rao said customers would be given advance notice of any disruption, and that hoteliers would try to soften the impact through alternative ordering options where possible.