When business meets backlash

OYO’s decision allowing hotels to refuse check-ins to unmarried couples is a lesson in how not to make policy

As OYO’s early investors like Lightspeed Venture Partners and Peak XV Partners negotiate partial stake sales at a $3.9 billion valuation – significantly below its peak $9 billion valuation in 2021 – one can’t help but wonder if recent policy missteps have contributed to this diminished investor confidence. It took just days into 2025 for OYO, a major company, to demonstrate how corporate policies can crumble under social pressure. Once the beacon of hope for young couples seeking judgement-free accommodation, OYO has become a case study in how not to navigate the delicate balance between social pressures and individual rights. The platform’s sudden U-turn – allowing hotels in Meerut to refuse unmarried couples and demanding proof of relationship status – isn’t just a policy change; it’s a surrender to moral policing that could reshape how businesses approach social inclusion in India.

This policy shift doesn’t exist in isolation. It’s part of a disturbing trend of increasing moral policing of young adults under the guise of preserving “traditions and culture.” From frequent hotel raids to police harassment and housing discrimination against bachelors, to calls for mandatory registration of live-in relationships, young unmarried individuals increasingly struggle to find safe spaces in society.

While OYO might frame this as a rebranding exercise towards a more “family-friendly” approach, the policy raises serious concerns about individual rights and corporate responsibility. First, by yielding to “local social sensibility” – particularly citing views of law enforcement and civil society in places like Meerut – the company sets a dangerous precedent. It suggests that businesses can compromise fundamental individual rights in the name of social appeasement. This raises a crucial question: Should local customs and demands override an individual’s right to privacy?

The policy’s requirement for proof of relationship status is not just ethically questionable but legally flawed. The Supreme Court’s doctrine of proportionality clearly states that any requirement for personal information must be sanctioned by law, necessary to achieve a legitimate aim, and proportionate in its interference to the need. This policy fails on all counts – there is no legal basis for hotels to demand proof of relationship status, no legitimate aim for such a requirement, and no justifiable necessity for demanding such personal information.

What makes this policy shift particularly troubling is its potential ripple effect. Already, similar demands are emerging in other cities like Bengaluru. This trend could easily expand beyond hotel access to affect housing, public spaces, and other aspects of daily life. Instead of progressing towards more inclusive policies, we are witnessing a regression that could normalise discrimination.

Inclusion, interrupted

The irony is that platforms like OYO, MakeMyTrip, and StayUncle originally emerged as solutions to a long-standing problem. Hotels have historically faced pressure from law enforcement, often through misuse of anti-trafficking laws, leading many to discriminate against young couples to avoid legal troubles. These booking platforms promised standardisation and safety, making properties accessible to all while ensuring respect and dignity. Given their market influence and the trust they built with hotels and customers, these platforms were uniquely positioned to advocate for reforms against the misuse of laws and police harassment against partner hotels and customers. They could have leveraged their data and experiences to demonstrate how safe, regulated spaces actually prevent exploitation while protecting individual privacy.

In today’s context, with judicial recognition of privacy rights, diversity, and accessibility, we expect leading brands like OYO to lead the way in creating inclusive policies. They should be incorporating global standards for diversity, inclusion, and accessibility, developing LGBTQ+ friendly policies, and standing up for customers who face societal harassment. Instead, OYO’s 2025 policy represents a complete reversal of its original promise and a troubling step backward for individual rights.

This case serves as a reminder that business policies don’t exist in a vacuum – they can either challenge discriminatory social norms or reinforce them. By choosing appeasement over principle, OYO hasn’t just risked alienating its loyal young customer base; it has written itself into business school case studies as the textbook example of how not to make policy in 2025. As recent investment developments suggest – with early backers seeking partial exits at reduced valuations – compromising core values under social pressure may carry not just moral but significant financial costs. While OYO’s spokesperson has maintained optimism about future growth, particularly citing its US acquisition of G6 Hospitality, the company’s retreat from its foundational principles of inclusivity raises questions about its long-term strategic direction and ability to maintain investor confidence in an increasingly values-conscious market.

(The writer is a research fellow at Vidhi Centre for Legal Policy)