The Hindu Business Line : Luxury hotels to cut room tariffs by 10-20%

The impact of the global economic meltdown and travel advisories issues by many countries as an aftermath of the recent terror attacks in Mumbai have caused a heavy dent in occupancy for hotels and, consequently, their business.

“The exact percentage of room rate reduction would be determined by the hotels depending on the room type and each hotel’s positioning in the market,” said Mr Vivek Nair, Vice-Chairman, the Leela Hotels, Palaces and Resorts, and Executive Committee Member – Federation of Hotels and Restaurant Associations of India.

Hoteliers said that November, before the attacks, was a good time for them in the city with average room rates (ARR) hovering around Rs 15,000 and occupancy levels at 70-80 per cent.

“In fact, November 2008 was better than November 2007,” said a hotelier.

But in December, the ARR has dropped to Rs 12,500, and hotels have decided to further bring down the rates by 10-20 per cent.

The industry needs immediate intervention from the Centre and State governments, he added.

“We would also want the State Government to levy the luxury tax on the actual tariff charged by us and not on the published rates.

“And till the business conditions improve and occupancy increases, we request that the luxury tax be reduced to 8 per cent instead of 12 per cent,” said Mr Nair.

These moves will help reduce the overall burden on the guests, and, consequently, increase the demand for rooms.

The Centre should also come up with a relief package for the tourism and hospitality sectors, he added. Since the hospitality industry has been recognised as a service exporter, exemptions on certain taxes such as service tax should be given.

More Stories on : Hotels

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Dumping duty on Chinese sulphur

Inflation no cause for worry any more, say economists

OECD indicators signal deepening global slowdown

RBI signals cheaper loans

‘Hotels need to work on guest-friendly security measures’

Luxury hotels to cut room tariffs by 10-20%

Truck rentals may dip to 5% on diesel price cut

Cotton fabric output drops to 4-1/2 year low

Micro and small enterprises get a lifeline

Relief to both developers and home buyers

SEZs await apex bank decision on ‘infrastructure’ status

Priority status to boost housing demand

IRDA seeks investment details from insurers

Weekly News Round-up

‘Monitor steel imports to safeguard domestic industry’