The Hindu Business Line : Bangalore hotels get ready to hike tariffs

Major hurdles
The main reasons for the lower price are dollar depreciation and a drop in demand
There has been a 20% increase in rooms across hotels this year.

Anjana Chandramouly

Bangalore, Sept. 13 The softening of room tariffs is not deterring Bangalore’s premier hotels from increasing their tariffs by at least 10 per cent in October.

According to Mr Sunil Prabhakar, Head, Sales and Marketing, The Leela Palace Kempinski, Bangalore, the main reasons for the lower price are the dollar depreciation and a drop in demand for hotel rooms.

The dip in prices is also due to an increase in rooms — there has been a 20 per cent increase (about 450 rooms in five-star hotels) across hotels in Bangalore this year compared to last year, said Mr Lemuel Herbert, General Manager of The Park. This also includes a new business hotel which started operations in the city this year.

While Leela Palace would be adding 100 rooms shortly, Mr Herbert said that The Park group has plans to increase rooms for its Bangalore hotel, though not finalised yet.

However, industry players are confident that these factors will not interfere with their annual rate revision exercise in October.

While conceding that the dollar depreciation has indeed impacted room tariffs in Bangalore, Mr Herbert said that with the onset of the tourist season in October all hotels will revise their rates.

Mr Chander Baljee, Chairman and Managing Director, Royal Orchid Hotels, said there has been much hype about Bangalore’s hotel tariffs declining.

Despite a downward trend, the average room rate continues to be in the range of Rs 11,000-13,000, across premium hotels.

According to industry sources, the first quarter of the current fiscal was not as good as the corresponding period of the last year.

There has been a drop of 10-15 per cent in occupancy rates across city hotels. One of the reasons being MNCs cutting down on travel costs. Cost-cutting among corporates has led to a flourishing parallel market — serviced apartments and guest houses — hitting the long-stay base that most hotels try to build up on.

Mr Vineet Verma, Chief Executive Officer, Brigade Hospitality Services, said, “The serviced apartment space has surely seen a noticeable increase in demand in recent times, except for the seasonal lows that one generally sees in the hospitality sector.”

With a range between Rs 1,000 and Rs 1,500 per day for serviced apartments, sometimes the high-end ones hitting even Rs 6,500 per day, the prices are attractive for corporates, cutting down on their hotel bills. Top-end hotels in Bangalore cost anywhere between Rs 12,000 and Rs 20,000 per night.

Industry players also feel that better air connectivity encourages business travellers to the city to return the same day, thus impacting the hospitality business.

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