This busy season, menu’s high room rates

Hotel room rates are set to surge as much as two-thirds as the business season kicks in a month from now.

Leading operators including The Taj Group, Oberoi, ITC and Leela are hiking room rates, primarily in ‘gateway’ cities such as Mumbai and New Delhi.

Data compiled by DNA indicate that early-bird room rates (bookings made 7 to 10 days or more, in advance) at hotels operated by Indian hotel chains in Mumbai are likely to increase from 4.76% going up to 21.05%.

For instance, the early-bird rate for a premium city-view room at The Leela Kempinski, Mumbai, for bookings in mid-September is Rs8,925 plus taxes, which shoots up to Rs9,350 plus taxes for mid-October.

The rates for a superior room at The Taj Mahal Palace & Towers, Colaba (Mumbai) for the same period are Rs8,550 and Rs10,350 plus taxes, respectively.

As far as increase in the best available rate category is concerned, it is the lowest with The Leela Kempinski, Mumbai at Rs10,500 plus taxes in mid-September and Rs11,000 plus taxes in mid-October showing an increase of 4.76%.

The highest increase of 66.67%, or by two-third, was noticed at The Trident, Mumbai, which is offering Rs7,500 plus taxes per room in mid-September and Rs12,500 plus taxes in mid-October.

Following suit is sister property The Oberoi, Mumbai, with a 36% differential (Rs 11,000 and Rs15,000) and The Taj Mahal Palace & Towers with 21.05% (Rs 9,500 and Rs11,500). All rates are excluding taxes.

The scene’s not much different in Delhi-National Capital Region, though the rate increase isn’t as steep as in Mumbai.

This is because of a surge in supply in the last 12 months.

Yet, the early bird rates in the capital hotels are up 7.14% to 44.44%. But what’s also clear is hotels charging less than Rs9,000 have better pricing power.

For example, executive club rooms at ITC Maurya, New Delhi are being sold at Rs12,600 and Rs13,500 - an increase of `900 or 7.14%.

On the other hand, for the ‘superior charm’ rooms at Vivanta by Taj Ambassador in New Delhi the price tag swings from Rs8,100 to Rs11,700 - that is, by Rs3,600 or 44.44% — in the same period.

The industry considers May to August as off-season, while October to March is business season, which peaks in the last two weeks of December.

September and April are viewed as ‘shoulder’ months from where rates start clambering north or south.

Noshir Marfatia, associate vice-president and GM, sales and marketing, The Park Hotels, said, Mumbai and Delhi are the two markets that will see substantial increase in the room rates this season.

“That’s due to the market dynamics and the demand-supply scenario. While new inventory in NCR may to some extent soften the rate hike depending on a hotel’s profile, properties in certain pockets, for example, Greater NOIDA where the Formula 1 race is scheduled in October, will see a tremendous increase of 60-100%,” said Marfatia.

So will the industrial slowdown hit the hospitality sector?

“It isn’t a serious concern yet. However, given that we have entered the festive season with Ganesh Chaturthi followed by Durga Puja, Dussehra and Diwali, it is likely that business hotels may see some impact as travel will be skewed more towards leisure and holiday compared with business. November will see a bounce back in business travel followed by another blip in December because of Christmas and New Year,” said a senior sales and marketing official from one of the four hotel companies being surveyed.