12/02/12, 12:42:31 EST

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5-star room rates in Delhi hit the roof

timesofindia.indiatimes.com

"The 1, 2 and 3 category does not exist here. Delhi has 14,000 rooms in start category while need is for 30,000 rooms. There's a desperate need of good budget hotels,"

NEW DELHI: A severe crunch of five star rooms in the capital this peak season - leading to skyrocketing tariffs - is not only pinching tourists but also becoming a worrying factor the hotel industry. The tariffs begin from a minimum of Rs 12,000 for a room in five-star hotel and goes up to anywhere up to Rs 25,000 with the average being between Rs 16,000 and Rs 18,000.

Coupled with a weak dollar, international tourists are finding Delhi - which has the second highest room tariffs after Bangalore - an expensive place to stay. Domestic business travellers now prefer day trips to Delhi or opt for guest houses and international seminars are headed elsewhere, say hoteliers.

"The booking trend we now observe is that outstation companies want their executives to make a day trip to Delhi and fly back at night," said Anil Bhandari, MD of ITC-backed International Travel House.

An average low-cost carrier return ticket from Mumbai or Kolkata to Delhi costs upwards of Rs 11,000. If a person stays here one night for Rs 18,000, the cost to company is nearly Rs 30,000. If the same person returns to Delhi next day, the cost is lower for companies at about Rs 23,000 and they are increasingly looking for cost cuts.

"Or, Bhandari added, companies ask travel agencies to look for guest houses or economic accommodation for their executives for a night stay here."

This factor, however, does not worry five star hotels as most of them are experiencing over 85% occupancy. They have their own reason to worry. "The alarming thing is that big companies in US or Europe now find Delhi an expensive place for hosting their regional meets.

The average room rate here is $400 and they can get almost similar accommodation at half price in southeast Asian cities like Bangkok, Singapore and KL," said Yannick Poupon, Taj Luxury Hotels area director (Delhi). Many hotels admit that international business travellers have no choice but to come to Delhi due to the booming economy. But when the same traveller plans a holiday with his family, high rates and weak dollar make India an expensive destination.

"When you sign your bill on company account, its different. When you have to pay from your own pocket, it's something else. Because of high rates in Delhi, nearby tourist destinations like Rajasthan, Agra and Varanasi may also suffer," said a senior hotel executive. The industry accepts that there is a huge problem. Federation of Hotel and Restaurant Association of India V-P Rajendra Kumar says that the shortage of four and five star rooms in Delhi and the resultant high rates arise from the fact that there is hardly any decent budget accommodation here.

"The 1, 2 and 3 category does not exist here. Delhi has 14,000 rooms in start category while need is for 30,000 rooms. There's a desperate need of good budget hotels," he said.

The problem is acute across India. Recently, said Kumar, the association executive organised its meet in Mumbai and the hoteliers attending it were told to make a daytrip because of severe shortage of rooms there. "I can't hold that meet in Delhi also as there are no rooms," he said.

 Printable Version  | published Nov 25, 2007