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South Hotel rooms rates drop 20%

Hyderabad, Dec 29 () : Except in Mumbai, in almost all the hotels in top South Indian cities and Delhi- NCR, room rates have dipped by 5-20%.

The season starting from September and lasting through the winter season usually witnesses a rise in occupancy and also in rates. Compared to last year, data received show  the demand has been low mainly because of new hotels coming up in these cities and demand not matching the fresh supply of hundreds of hotel rooms.

Members of the Federation of Hotel & Restaurant Associations of India recorded 5-20% decrease in room rates for their hotels in Delhi, Mumbai, Bengaluru, Chennai and Hyderabad in this winter season.

The glut of rooms in South markets have been putting pressure on hotels to decrease room rates says Vivek Nair, MD and vice chairman of The Leela Group who has a big presence in the South.

Two large luxury hotel came up in Chennai due to which rates dropped by 10-15% in the current winter season compared to last year. In Bengaluru, 5-10% decrease in room rates was reported while the worst drop was in Hyderabad with a 20% drop in rates compared to last year.

Ranjit Balan, managing director at hotel consultancy firm said that with economic slowdown continuing and investor sentiment remaining low, corporate companies and individuals businessmen in India are now strict about spending on travel and hotels.

Big hotel chains reported that from November- December end, hotel rates dropped in Delhi-National Capital Region, 7-8% in Chennai and 5% in Bengaluru. Only hotel rates in Mumbai have been steady.

Delhi-NCR and Chennai added 3 and 5 star category hotels in previous one year due to which there is a glut because of which rates have come down this winter. 5,000 new rooms have been added in the five cities in the three-to-five star and luxury categories . Out of this 1,200 rooms were added in Delhi-NCR region this year, 800 rooms in Mumbai and Chennai, 1,300 in Bengaluru and 750 in Hyderabad.

Winter season usually accounts for 60-65% of annual business and from October till March is termed the peak tourism season to India both for domestic corporates and leisure travellers. This season demand for rooms has not kept pace with the growth in room supply.

Sheraton, Westin, Le Meridien and W brands that operate hotels in India feel that economic slowdown has resulted in a drop in demand for hotel rooms.