The Hindu Business Line : Hotel occupancy level holds even as room rate dips

Thiruvananthapuram, Nov. 24 Hotels in the State have been able to maintain the April to September occupancy levels on a par with year-ago levels but at the expense of average room rate (ARR).

Thus, the off-season ARR has climbed down by 1.97 per cent leading to a sharper fall in revenue earnings of at least 14 per cent, according to South India Hotels and Restaurants Association (Sihra).

BULK DISCOUNTS

This was attributed to the competitive reduction in tariff through bulk discounts or otherwise as hotels tried to fend off a dire situation brought about by the global recession and its impact on corporate and leisure travel.

The global downturn, Mumbai terror attacks, travel advisories issued by source markets such as the US, the UK and Europe, and more recently the H1N1 pandemic, have impacted the hotel industry adversely.

This has affected occupancy level across the country and across classes of hotels, particularly the five-star and four-star properties.

The key drivers that sustained the occupancy during the off-season were domestic tourism, the MICE (Meetings, Incentives, Conferences and Events) market and special packages promoted during the monsoon, said Mr M. P. Purushothaman, President, Sihra. The performance during October and November are encouraging, he told newspersons here. Stimulus packages announced by the Centre have been a shot in the arm for the industry.

But in the interregnum, the industry would still have to contend with cancellation of charters and travel advisories made worse by slow-paced economic recovery.

Sihra was hopeful that the new airports in Bangalore and Hyderabad and planned expansion of other major airports would help handle more inbound traffic.

DOMESTIC TOURISM

Fortunately, domestic tourism has been growing at a faster clip and with the overall improvement in the economic parameters, it is hoped that the industry would improve its overall performance in 2010.

This is the canvas against which Sihra is hosting the annual convention of hotels and restaurants in Thiruvananthapuram on December 7 and 8.

The annual convention is being held for the first time in Kerala, Mr Purushothaman said. The Chief Minister, Mr V. S. Achuthanandan, will inaugurate the convention, which will be attended by State and Central Ministers.

The business sessions will be addressed by key policymakers, senior Government officials, industry leaders and experts in various fields.