The Hindu Business Line : Room tariffs in star hotels may rise by 15-20%

Kolkata, Oct. 2 The average room rates (ARR) of star hotels in the country are likely to go up as hotel majors in metros plan to hike room tariffs by about 15-20 per cent during this festive season.

According to industry analysts, the growth of Indian economy matched with shortage of quality hotel rooms will push up the ARR, especially in metro hotels where corporate travel accounts for 85-90 per cent of the hotels’ total business.

“There is going to be a hike in room rates during this festive season. Hotels in metro cities have already increased or plan to increase the ARR by 15-20 per cent,” Ms Reena Walia, Research Associate (Retail & Hotel), Angel Broking told Business Line over the phone. “We have been doing good business across all the metros and we have already increased our room rates by 15-20 per cent on an average in all our properties across India,” a senior official of Taj Group of Hotels said on condition of anonymity.

5% hike in Bangalore

Industry experts, however, felt that while Mumbai, Kolkata and Chennai are likely to witness a sharp upward revision of hotel tariff, Bangalore hotels, noted for high room rates, are not likely to join the party. According to Mr Taposh Chakraborty, CEO of Boutique Hospitality Consulting, a Bangalore-based hospitality consultancy firm, “The first quarter of this fiscal has seen drop in occupancy levels in Bangalore hotels. While some hoteliers have decided to hike their room rates, the rest of them have decided not to hike the rates. The likely ARR growth in Bangalore hotels would be about five per cent.”

“The serviced apartment industry in Bangalore is thriving and is taking away business from the star hotels. There will be a minor hike in room rates during the current season,” said Mr Lemuel Herbert, General Manager, The Park Hotel, Bangalore.

Shortfall expected

Industry experts estimate a shortfall of 1.25 lakh rooms in the country. “Over the next two to two and half years, another 70,000-80,000 hotel rooms are expected to come up. But still there would be a gap in demand and supply situation,” Mr Chakraborty said.

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