With peak winter season round the corner, hoteliers are set to increase average room rates. October to February is the key period for both leisure and corporate travel.

In the past few months, hotels have been facing challenging times due to the depressed economic sentiment, but costs of operating hotels have been steadily rising.

Kaushik Vardharajan, Managing Director – HVS Global Hospitality Services, South Asia, said hotels have been absorbing rising costs, but at the same time the demand has been growing 8-10 per cent despite cautious economic sentiment. “With the rising costs, hotels are expected to increase rates by 5- 10 per cent this winter,” he added. Vardharajan also said that new supply of rooms is not expected to grow at the same pace compared with the past five years.

Several key locations have been facing oversupply of hotel rooms which has also contributed to the subdued average room rates in the past. Though the hike of 5 -10 per cent is going to be much smaller than the previous 20-25 per cent hikes.

Meanwhile, hoteliers have an optimistic outlook for the winter season. Taj officials in the past had said that the forward bookings look promising and were at the same level compared to last year and that hotels are expected to increase average room rates by 8-10 per cent.

Kapil Chopra, President, Oberoi Hotels, also said that the company was bullish on winters. Some hoteliers added that there are some concerns with the impending elections.

The depreciating rupee has also made India an attractive destination for foreign tourists.

K. B. Kachru, Chairman-South Asia, Carlson Rezidor Hotel Group, added, “Despite challenging conditions, hotels will have to take some inflationary increase in room rates keeping in mind the peak winter season.” He added that despite the rate increase, the rupee depreciation will ensure that India continues to be an attractive destination for foreign tourists.

>meenakshi.v@thehindu.co.in

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