Hoteliers are grappling with the global economic slowdown as corporate houses tighten their purse strings, forcing them not to hike tariffs this year. Excess capacity has also cast a shadow over the hospitality industry and hotels in major metros failed to cash in during the peak season.
Sanjeev Sekhar, GM, Marine Plaza said, “There has been no change in our tariff rates and it remains the same as last year. But our occupancy levels are at around 80-90 per cent.”
Sekhar claimed that while they have retained last year’s tariffs, few of their competitors had to slash them as the demand remained subdued due to cut in corporate expenses.
Generally, room rates are the maximum during the final week of December and first week of January and this is the peak season for the travel and hospitality industry. Occupancies in the top hotels have witnessed only a five to seven per cent increase, half of what it normally is during this time of the year.
Ajay Bakaya, executive director of Delhi-based Sarovar Hotels said that the hotel has revised its tarifs in the first week of October only by around 5-7 per cent. “While the room tariffs remained flat occupancy levels are increasing. We are not able to increase room rates as there is too much of competition and oversupply in the market putting pressure on rates.”
Bakaya said that on an average there is around 15 per cent excess supply in the market. Echoing similar view Jyotsna Suri, chairperson and managing director, The Lalit Suri Hospitality Group said, “It has been a mixed year for the Indian hospitality and tourism sector. The hotel occupancies witnessed a marginal improvement by about 4-5 per cent, while the average room rates largely remained stable with 1-2 per cent increase.
In the Union Budget 2011-12, the sector received a blow from the government in the form of 10 per cent service tax that has imposed on hotels.
Ashwini Kakkar, executive chairman, Mercury Travels, said “There has been a decline in international tourists coming to India due to uncertain global economic condition. A significant decline in tourists coming from Europe and US has been witnessed this year. While the share of domestic travellers staying in hotels has been rising, most luxury and premium hotels depend more on foreign tourists for a major part of their income.”
However, there is a change in trend that tourist are going to nearby places rather than long distance destinations. Kakkar further added that corporates have also cut down on their expenses, which has also impacted the sector. The Indian hospitality industry normally experiences high demand during October-April and the December and March quarters contribute to more than 60 percent of the year’s turnover for Indian hoteliers.
Generally, room rates are the maximum during the final week of December and first week of January and this is the peak season for the travel and hospitality industry. Occupancies in the top hotels have witnessed only a five to seven per cent increase, half of what it normally is during this time of the year.
Ajay Bakaya, executive director of Delhi-based Sarovar Hotels said that the hotel has revised its tarifs in the first week of October only by around 5-7 per cent. “While the room tariffs remained flat occupancy levels are increasing. We are not able to increase room rates as there is too much of competition and oversupply in the market putting pressure on rates.”
Bakaya said that on an average there is around 15 per cent excess supply in the market. Echoing similar view Jyotsna Suri, chairperson and managing director, The Lalit Suri Hospitality Group said, “It has been a mixed year for the Indian hospitality and tourism sector. The hotel occupancies witnessed a marginal improvement by about 4-5 per cent, while the average room rates largely remained stable with 1-2 per cent increase.
In the Union Budget 2011-12, the sector received a blow from the government in the form of 10 per cent service tax that has imposed on hotels.
Ashwini Kakkar, executive chairman, Mercury Travels, said “There has been a decline in international tourists coming to India due to uncertain global economic condition. A significant decline in tourists coming from Europe and US has been witnessed this year. While the share of domestic travellers staying in hotels has been rising, most luxury and premium hotels depend more on foreign tourists for a major part of their income.”
However, there is a change in trend that tourist are going to nearby places rather than long distance destinations. Kakkar further added that corporates have also cut down on their expenses, which has also impacted the sector. The Indian hospitality industry normally experiences high demand during October-April and the December and March quarters contribute to more than 60 percent of the year’s turnover for Indian hoteliers.