Hotel Room Rates Rise on Corporate Demand

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. October 14, 2008

By Rumi Dutta Hardasmalani

The Times of India

MUMBAI, India, November 21, 2005. Luxury hotel chains across India are on a high, with the hospitality sector finding it tougher to be hospitable to visitors. At five star hotels across the country, it is getting tougher to find rooms as average hotel room occupancy level have crossed the 90 percent mark against 70 percent last year. Buoyed by this surge in demand, hoteliers have hiked room rates across all categories by around 25 percent during this (October-December) period. With demand for rooms completely outstripping supply nation-wide, the cash registers are ringing.

"The hotel room rates across all emerging markets in South East Asia, Hong Kong and Dubai are on an increase and India is no exception. It is purely a demand driven growth", says Lalit Suri, chairman of the Delhi-based Grand group of Hotels. In fact, the room rates this peak winter season, for many hotels across Mumbai, Delhi, Bangalore, Chennai and Hyderabad are almost at an all time high.

Says GM of one of the ITC group Hotels in India, "with business booming, new trends are surfacing. Global net-based bookings of hotel rooms have doubled to 15 percent of the total bookings. Also, MNCs are sending their top management expat executives to set up base in India, who are initially accommodated in city hotels. This has led to a dramatic increase in the 'long stay' booking category.The new tariff card of the Taj and the Oberoi hotel rooms in south Mumbai are offering a per night stay for around Rs 11,000 for standard rooms.

The ITC Grand Central in central Mumbai have increased basic room rates to Rs 8,000 for a night stay from Rs 6,500 in August while InterContinental -- The Grand in north Mumbai has hiked the standard room rates to Rs 6,500. The rates this season are around 28-30 percent higher compared to the peak rates last year. Rattan Keswani, senior V-P Oberoi Hotels & Resorts, says, the rate increase is more of a correction as over the last three to four years business had faded and there was barely any scope to hike rates.

While the north Mumbai suburban hotels have witnessed a steeper growth in occupancy rates, due to their proximity to the airports, compared to their downtown south Mumbai counterparts, the increase in room rates by town hotels are much higher, said Heiner Wordling, GM, InterContinental-The Grand. With foreign tourists flocking the beaches of Goa and the backwaters of Kerala, October-December period every year marks the profit-making season for Indian leisure hoteliers.

But now, with India emerging as an attractive investment destination, it is the business traffic that is adding to the significant numbers and the upside that the domestic hotel industry is witnessing.

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Copyright (c) 2005, The Times of India

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