Indian hotels drop rates amidst poor market conditions

FACED with an economic slowdown, increasing operation costs and rising room supply in many cities, hotels in India are rolling out discounts for the July to September period in the hopes of attracting more guests and shoring up RevPAR.

A Federation of Hotel and Restaurant Associations of India study reveals that in year-on-year comparisons for the January to June period 2013, average room rates fell 11 per cent in New Delhi, occupancy tumbled six per cent and RevPar slid 10 per cent.

Rakesh Lamba, managing director, Omega Hospitality Services, noted: “The persistent fall in RevPAR is the biggest challenge for hotels, especially in a dull business environment and high-cost regime.”

Padmini Narayanan, managing director, Chennai-based Aakshaya Tours, said: “Room rates have fallen 27 per cent in Chennai (for the January to June period), partly due to new supply of more than 1,000 new rooms in the city and partly due to the downturn in business sentiment across the country. Discounts are the only way for hotels to fill up rooms in the lean season that will last till October.”

Trade sources report that among hotels slashing rates are Vivanta by Taj Hotels and Resorts, and Leela Palaces, Hotels and Resorts properties, offering discounts between 10 and 20 per cent.

Veer Vijay Singh, COO, Vivanta by Taj Hotels and Resorts, said: “In a slowdown situation, people become very cautious about spending and trade down on hotels they wish to stay in. Domestic tourism has grown and taken up our offers and discounts.”

However, Bruno Aloysius, manager-sales and marketing, Ramada Resort & Spa, Kochi, said: “Many hotels are maintaining the same rates as last year, which is de facto a discount of seven to 10 per cent.

“Some hotels are extending discounts well into the high season period of October and November. This is an unhealthy practice.”

Sponsored Post