Hotel rooms rates are getting dearer by up to 20% as the Indian hospitality industry enters the business season in the coming three months.
The extent of rate hike, however, will differ across hotel companies depending on location, brands and customer segment (budget, mid-market, premium and luxury) being targeted.
Arif Patel, vice president - sales, marketing, distribution and loyalty, AccorHotels India, said, "We are looking at 15% to 20% increase in rates across all channels in the key metros. Metro hotels in compressed markets are already clocking 75% monthly occupancy, indicating a weekday occupancy of over 90%. Moving into high demand months, the company is looking at yielding higher rates."
Executives from hospitality chains including Oberoi, ITC, Marriott, Hyatt and Starwood did not respond to queries emailed seeking details regarding the possible price increase and the reasons for the same.
Market-wide occupancy, according to Patel, was recorded at 66% in 2016-17 and the last time India witnessed a nationwide occupancy that was higher than 65% was in 2007-08. "Demand is outpacing supply in most major cities. Overall supply grew by 6% against a 10% increase in demand. Moving into convention and wedding seasons, there will be multiple constrained dates where hotels will definitely get the opportunity to yield higher," he said.
Chinmai Sharma, chief revenue officer – Taj Hotels Palaces Resorts Safaris, said pricing is always subject to changing market conditions. "In general, we feel that the business sentiment in the country is positive and we are seeing a sustained boost in occupancy rates which gives us more pricing confidence. We have been able to improve our average rates in most markets and we have seen a healthier increase in our leisure portfolio, especially at our palaces," he said.
ON THE RISE
- Demand is outpacing supply in major cities, said Arif Patel of AccorHotels
- Moving into high-demand months, AccorHotels eyes higher rates
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