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Hotels going full even before season warms up

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Tunia Cherian George

Mumbai, Nov 11

IT is only the second week of November - the beginning of the busy season - but hotels in Delhi, Bangalore, and Mumbai are already reporting full occupancy on most days of the week.

Major hotels in these cities have no room for guests without advance booking.

Mr Sanjoy Pasricha, Corporate Head (Sales and Marketing), The Leela, said that next month, up to December 15, the hotel expects to record 90 per cent occupancy during weekdays and 70-75 per cent during weekends.

Occupancy at another North Mumbai hotel, the Grand Hyatt, is also near capacity.

Mr Sarosh Khatib, Director of Marketing, said that business has picked up since Deepavali and occupancy levels were around 90 per cent. He expects occupancy to hover in this range right through to mid-March.

"Typically, whenever there is an international conference, hotels across the city are sold out. But, this year, the demand has not been limited to the business traveller alone. We are getting a lot of enquiries from frequent independent travellers as well," he added.

Some hotels have already revised the rates by 20-25 per cent. But when contacted, an official in a Mumbai hotel that has quoted higher rates, said that the basic tariff has not been hiked - the earlier discount has been discontinued.

While the hotel industry is not complaining, an industry watcher said that with the number of rooms unlikely to increase immediately, the industry is being forced to turn away a lot of business, which could, in the long term, prove negative. Indiscriminate tariff hikes could also ultimately backfire on the industry, he added.

So, how much business is the hotel industry losing out due to inadequate capacity?

According to Mr Himmat Anand, COO of SITA Inbound, a major tour operator, it would be difficult to tabulate the losses. Overall, tourism has grown by 13-15 per cent over the last year compared to 25 per cent growth witnessed in the previous year.

However, he added that growth this year has been on a larger base.

He had a word of caution for hotels that have jacked up their tariffs by 40-50 per cent. According to him, this magnitude of increase is unwarranted. If the tariff hikes continued, India would lose the cost advantage that it currently enjoys over competing destinations. "In the long term, the inadequate infrastructure coupled with high costs could affect India's tourism prospects."

Thailand and Egypt have already faced the adverse affects of this trend, and Dubai is travelling down the same path, he added.

(This article was published in the Business Line print edition dated November 12, 2005)
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