NCR Hotels Increase Tariff as Business Recovers

October 27, 2009	(Be the first to rate this story!)  Loading ...
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It’s proving to be a cracker of a Diwali for Delhi’s hotel industry that had been reeling under the impact of global recession and had seen a sharp erosion in occupancies and tariffs since last year. With the economy gradually recovering and industry expecting a significant increase in inbound travel this winter, hotels have hiked tariffs by 15% to 25% for this peak travel season. As a result, five star tariffs — that had fallen to an unprecedented low of Rs 6,000-8,000 this summer — are now upwards of Rs 12,000 as hotels try to make up for the business lost since early last year.

The newly opened Leela Kempinski, Gurgaon, — which since opening this summer has emerged as the luxury hotel with the highest tariff in the NCR — has raised room rates by Rs 2,000 and suites are dearer by Rs 5,000-10,000. According to the online published tariff, room rates have gone up from the summer range of Rs 19,000-26,500 to Rs 21,000-28,500 now. Federation of Hotel and Restaurant Association of India (FHRAI) vice-president Rajendra Kumar said on an average, tariffs have gone up by 25%.

Imperial’s spokesperson Ajanta Chatterji said: “Two years prior to recession setting in were a dream run for the industry. This summer, we had to lower tariffs quite a bit as the demand was weak. Now for this winter, we have hiked tariffs by 15-20%. So the summer average room rate of Rs 10,000 is about 20% more now.” However as expected, the post-recession recovery is throwing up its own surprises. “The travel trend has changed. Last winter we had international leisure and business travellers in 70:30 ratio. Now the ratio has inversed,” she added.

The Oberoi, Taj Mansingh and Imperial have almost similar tariffs being in the same upper luxury business segment. The move to hike tariffs has sharply divided the industry as the recovery is still shaky. Rajendra Kumar said filling rooms was more important than hiking tariffs. “Everyone is marking up but the important thing is to see whether we can sell or not. The economy is still recovering and it’s important to get travellers back first. Raising tariff just because it needs to be done from October 1 or September 1 after they touched new lows in summer should not be the priority,” he said.

He added, “Hotels are raising tariffs to cut the losses incurred earlier. The bookings look good even at the raised tariff levels.” Sarovar Hotels and Resorts MD Anil Madhok says there is a distinct upward trend and hotels are keen on filing up rooms. “We may even see more aggressiveness in rack rates from November 1 but as of now hotels are cautious,'’ Madhok said. Travel Agents Association of India chief Rajender Rai said traveller inflow looked better this winter after a long time. Vatika group director (marketing and operations) Gaurav Bhalla agreed that business activity was looking up and would continue on the upswing till the Commonwealth Games at least.

News Published Under:   Hotel Industry in India |

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