Come October, travellers will have to shell out more for five-star hotel rooms across the country as hotels are set to increase room rates by 15-25 per cent across most locations.
Industry analysts suggest that the revision in Mumbai and Delhi could be up to 25 per cent. At destinations such as Goa and Kerala it could be as much as 30 per cent.
In effect, customers would have to pay about Rs 20,000 for a room at a south Mumbai five-star, up from about Rs 16,000 they pay now. Last year, room rates increased 16 per cent in Mumbai.
In Delhi, hotel rates overall will increase by over 20 per cent. Gurgaon-based Trident Hilton has already increased its rack rates by 30 per cent and its contracted rates by 15-30 per cent.
"Trident Hilton is one of the highly-priced hotels in the country and we have revised our rates keeping in mind our past relationships and future commitments," an executive said. "In general, the Delhi market will see an increase in rates by over 20 per cent this year, against 18 per cent last year."
Bangalore, India's IT industry hub, may see an increase of about 10 per cent in room rates. "We will revise our rates from September, but this time it will be considerably less than last year as room demand in Bangalore is dropping," said an executive of The Leela Palace Kempinski, Bangalore.
Bangalore has had the highest rate of about 12 per cent in the past three years. But this year it will be lower as the supply of rooms is expected to exceed the demand by the year end.
Bangalore, which accounts for over half the number of business travellers visiting India, has about 2,500 rooms in the premium category. The city will add another 3,000 rooms over the next five years.
Chennai and Kolkata, could see a rate revision upwards to 15 per cent. ITC Hotel, The Grand Central and The Luxury Collection in Mumbai plan to give corporate clients an option of two rates.
Anil Malik, general manager, ITC Hotel, Mumbai said: "This year, for the first time, we will offer two different rates to our corporate clients. This would be 25-30 per cent less than the bar rate. While from September 2007 to March 2008 we will charge revised higher rates, it will be lowered from April 2008 to September 2009."
Bar rates are flexible rates over a week. Since hotels offer a different rate during the weekdays and a different one at weekends, they offer corporate rates to companies, which are lower than bar rates.
This means that if a hotel charges a common traveller Rs 16,000, the corporate client will pay only Rs 10,500.
Hotels are known to revise rates around September-October every year, when the tourist season begins. Many prefer to make their business trips also at this time.
Shortfall fuels hikes
According to the department of tourism, foreign arrivals in India increased 15 per cent between 2005 and 2006. More than half the number of tourists are foreign business travellers.
Besides, about 300 million domestic tourists travel to various destinations annually and that number is expected to grow by 10-15 per cent over the next few years.
The hotel industry has 110,000 rooms and estimates a shortfall of 150,000, which has fuelled the regular room rate hikes.
The hotel industry will get a fillip with the 2010 Commonwealth Games to be hosted in Delhi. The government has given approval to about 300 hotel projects, nearly half of which are in the luxury range.