The Hindu Business Line : Kolkata 5-star hotels room rates to go up 15-20%

The average room rates (ARR) in five-star hotels at Kolkata are expected to go up by 15-20 per cent this year, say industry sources. This growth will be fuelled mostly by an increase in demand from corporate clients because of a spurt in industrial activity in the State.

Mr Samit Ganguly, Director Sales, Hyatt Regency Kolkata, says that there will “be a huge demand for hotel rooms in the city this year with projects such as the Tata Nano factory taking shape. We expect good corporate traffic with engineers, delegates and buyers visiting the city for work,” he said .

“The ARRs have more than doubled since 2005 from around Rs 3,500 to Rs 9,000 currently, and this year, there will be a steady growth of around 15 per cent,” he added.

The hotel industry in the city has registered a growth of 60-70 per cent since 2006, he said.

“The ARR had grown by 40 per cent last year and this year we are expecting a 20 per cent growth with demand largely outstripping supply in an untapped market,” said Mr Ranvir Bhandari, GM, ITC Sonar Kolkata.

The hotels are also in an expansion mode with hotels such as the Hyatt and ITC planning to set up new blocks adding 70-100 rooms on an average, sources say.

Corporate clients

The customer base in the city’s five-star hotels has also shifted largely towards corporate clients over the years. “Fully 90 per cent of our business is constituted by corporates,” Mr Bhandari said, adding, “Kolkata is not really a tourist destination.”

Mr Amitabh Rai, GM of the Oberoi Grand, however, differed, saying, “Almost 20 per cent of our revenue can be attributed to the leisure clientele”.

Mr Nitin Sakunia, Director, Travel Bureau of India, said the hotels earned higher revenues from tourists as against corporate clients because of the former’s spending on food and beverage, spa and shopping.

The slump in the US market and the rupee depreciation has had little impact on the occupancy rates, said Mr Ganguly. The proportion of foreign clients is 45 per cent against 55 per cent domestic clients in Kolkata, said Mr Bhandari.

The ongoing occupancy rates in different hotels have also been impressive. “The occupancy rate since January this year was 81-82 per cent,” Mr Ganguly said. “Now we don’t face an off-season in Kolkata,” he added.

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