Check-ins drop 10% in Business Hotels

June 17, 2008	(Be the first to rate this story!)  Loading ...
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The slowdown in some segments of the economy may be beginning to impact the hospitality industry. Occupancy levels at hotels catering to business travelers have dropped 5-10% since January-end, with major impact seen in Bangalore and Hyderabad, analysts said.

Though industry experts dub this a cyclical phenomenon, there are others who believe there is more to the dip than just the seasonality. A slump in the stock markets, rising input costs and weakening dollar have led to a cut in travel and lodging costs by the companies.

And if this continues, business hotels may be in for tougher times. May-June is a lean phase for business travel since its vacation time. Awadhesh Garg of Kotak Securities Ltd, said economic activities have been on the decline since January-end.

“Due to rising costs, companies are facing pressure on their earnings; intentional cost-cutting is leading to a 5-10% drop in occupancy levels for business hotels in June,” Garg said.

Though a full-fledged slowdown has not hit India Inc yet, fears of one are impacting business, say experts. Also, major expenditure-cutting exercises by information technology sector companies, which are hurt by rupee appreciation, have begun to impact Bangalore and Hyderabad hospitality segments.

Pradeep Kalra, senior vice president, marketing, Sarovar Hotels, said business has been affected by slowdown fears. “Another reason for the dip in occupancy is the hike is airline fares. This has impacted corporate travel.”

News Published Under:   Real Estate India |

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