Mumbai hotels set for 40% tariff hike

Room rates seen rising September onwards

MUMBAI: Concerns of a possible slump in the hospitality segment notwithstanding, hotels seem poised to increase tariffs in the upcoming business season.

A recent survey conducted by DNA Money across south, north and suburban Mumbai hotels indicates there will be substantial difference in tariffs for bookings before and after August 31. Room tariffs could go up by up to 42%.

While some hotels plan to enforce the rate hike from September 1, a handful of others have decided to defer it to October.

Table shows the best available rates for a base category room during weekdays. The rack rates tend to be much higher and are as much as 30% over and above the best available rates.

In south Mumbai, The Oberoi leads the pack of hotels in both rupee and percentage terms. The luxury hotel will increase room tariff by Rs 6,000 or 40% over and above the current rate.

In north Mumbai, The Orchid, an ecotel hotel, leads the group both in rupee and percentage terms with an increase of Rs 4,000 and 42%, respectively. The second- and third-highest increase in percentage terms are at Le Royal Meridien and Sahara Star at 38% and 33%, respectively, though in rupee terms, the increase is very much the same, i.e. Rs 4,000.

At Rs 21,500 plus a 10% luxury tax, the Taj Mahal Palace wing will be the costliest in the luxury category rooms for bookings September onwards, followed by The Oberoi at Rs 21,000 plus 10% luxury tax.

In the business hotels category in South Mumbai, however, Trident Towers beats the Taj Mahal Tower wing, the former being expensive by Rs 250.

In central Mumbai, the competition is between two luxury hotels — ITC Grand Central - A Luxury Collection and the newly opened Four Seasons Hotel. While the latter appears to be priced impressively at Rs 18,850 for a base category room, it is the ITC-Starwood combination that wins the battle at Rs 15,000 plus 10.2% tax.  

And how? Four Seasons offers Rs 4,000 off on the total bill amount during the stay.
Thus, the effective room rate is Rs 14,850 plus 5% service charge and 10% luxury tax - i.e., if you are not using any other chargeable facilities. Besides, if you are really lucky, there are possibilities of getting an upgrade to a superior room priced at Rs 22,050 plus tax for Rs 14,850 plus tax and minus the Rs 4,000 credit offer.

Another reason ITC scores over Four Seasons Hotel is that it also offers a host of value add-ons, including complimentary buffet breakfast, evening cocktails and laundry pressing, to name a few. However, there is a levy of 0.2% luxury tax on the bill amount, in addition to the 10% luxury tax, i.e. (10 + 0.2 = 10.2% tax).

In north Mumbai, rooms at the JW Marriott Hotel at Juhu will be the most expensive at Rs 16,500, though the increase from its August rates is just about Rs 2,000 or 14%. Not far behind are ITC Maratha - A Luxury Collection, Grand Hyatt Hotel and Hotel Sahara Star at Rs 16,000. While ITC sees an increase of Rs 3,500 or 28% over its August-best rates, the increase at Le Royal Meridien and Sahara Star of Rs 4,000 are 38% and 33%, respectively.

Tucked alongside the Powai lake in suburban Mumbai, The Renaissance Hotel has not had much competition till last year. However, with the opening of Ramada Hotel in the vicinity early this year, the situation appears to have changed a bit. This is clearly evident from that fact that while Ramada is increasing its October rates by Rs 3,500 or 41%, Renaissance is offering a rate of Rs 16,000 plus tax including breakfast and 2-way airport transfers, an increase of Rs 2,500 or 19% over the August rate.

An interesting observation in the entire rate-hike story is global hotel chain Carlson Hospitality’s Park Plaza property in association with Nensey’s of Royal Palms at Goregaon. It seems the hotel’s management is not looking at a rate hike at all. What’s more, its Rs 7,500-per-night charge includes breakfast, two-way airport transfers and tax.

t_ashish@dnaindia.net