The Hindu Business Line : Hotels do not fear any slowdown in occupancy

Mumbai, Oct. 2 Hospitality majors have rebuffed travel agents concerns that the hotel occupancies in India will remain low during the peak season starting October because of the global economic slowdown.

The companies say that while there might be a slight dip in the tourist inflow, business will be as usual. The prime reason for that is the Indian market has by and large not seen “any real supply of rooms coming in,” Mr Ajoy K. Misra, Senior Vice-President, Sales and Marketing, Indian Hotels Company told Business Line. Indian Hotels Company is the operator of Taj group of hotels.

Forward booking

“Forward bookings are looking fairly good for the season. The fact is that demand-supply equation hasn’t changed much for the season. So, the season which used to be choc-a-block for hotels, their basic occupancy or pressure will not get affected by a slight demand slowdown. In the peak season, hotels were turning away 10-12 per cent of demand; with a five per cent slowdown they will still be full!” he said.

The hoteliers are also positive that the average room rates will remain high during the peak season. And there is no reason for them to lower rates to keep up the occupancies.

Spokesperson of the Oberoi Group replying through an e-mail said, “We expect the occupancy to witness an organic growth and the usual increase in average room rates, similar to last couple of years.” She added, while certain markets and sectors, like the financial sector, may not be delivering as before, demand from other geographies continues.

Indian Hotels also reiterated this. “It’s a high demand season and bookings are looking good, so there is no reason why the rates should come down,” said Mr Misra.

Recently, the hotel industry revised its room tariffs as well, which is an annual exercise. There has been an increase of 8 to 15 per cent in room tariffs this year. The hospitality sector makes this change every year as it moves from lean to peak season.

Hoteliers also say that this revision covers the investments that they make to improve their products and provide better experience to guests. It also covers them on account of inflation.