Exorbitant hotel room rates in Bangalore have forced leisure as well as business travelers to break their bank. No branded hotel in Bangalore is charging less than $350-500 for a night stay. With the prevailing scenario, the city becomes one of the most expensive places in the world for those looking for a hotel room.
Supply constraint is believed to be the major factor responsible for such a situation. Indeed, many rooms in Bangalore are booked till February 2008, say the hoteliers. With Bangalore fast emerging as a business hub, demand for hotel rooms is believed to be outstripping the supply. To save on money, travelers are looking forward to rooms in unbranded category such as serviced apartments and standalone boutique.
The branded hotel category is slowing loosing out to unbranded ones which are emerging as the best savior for travelers. Occupancy of branded hotels has dropped by nearly 3% in the past 1 year.
Bangalore sees the highest number of business travelers visiting India every year. Big IT companies such as Infosys and Wipro have set up their own guest rooms in the city to prevent non-availability of rooms.
Average Room Rates (ARR) in branded hotel category in India has increased by 280% in the past three years, says HVS International. There are around 1, 09,000 hotel rooms in the branded segment in India compared to 90,000 in London and 75,000 in New York. With India hospitality sector to see an investment of $2 billion in the next three years, the ARRs are likely to soften.