At Oberoi Hotel in Mumbai, a single occupancy room usually goes for Rs 17,000 a night. Now, it is available for Rs 10,000. Bargain further, and the executive at the reservation desk says, “Send in your expected rate, sir, we will talk to our GM and get back to you.”
This is the peak season for foreign tourist arrivals in India. Yet hotel rooms are going at substantial discounts. Green shoots, it would seem, are still to appear.
Typically, the ‘peak season’ extends well into December, but this time around occupancies have dropped to close to half the room inventories. Consequently, rooms are available at discounts of 40-55 per cent in all major cities except New Delhi, where the demand is somewhat better due to official visits.
But even in Delhi, hotels are offering discounts of up to 15 per cent. According to some senior industry officials, the current offer rates are comparable to those of early 2000s.
Hefty discounts
But in Kolkata and Chennai, hotel rooms are going at significant discounts. The best available rate (BAR, as it is called) for a basic category room at ITC Sonar in Kolkata is Rs 9,000 against the rack rate of Rs 20,000; a room at Taj Mount Road in Chennai goes at Rs 7,425 (rack rate: Rs 14,000). Book in advance, and Taj offers a further 15-20 per cent discount on BAR.
Some hotels even bundle complimentary breakfast, happy-hour at the bar and airport pickup and drop.
Till last year, during this period, most hotel rooms used to be ‘booked out’. “This year, future bookings are very poor,” says Mr T. Natarajan, CEO, GRT Hotels and Resorts and Secretary of the South India Hotels and Restaurants Association.
Gloomy outlook
According to the United Nations World Tourism Organisation, international tourist arrivals dropped 1 per cent in the second half of 2008. There are no signs yet that this trend will be reversed in 2009. Arrival numbers are forecast to be flat at best. Quoting the World Travel and Tourism Council’s forecast, Mr P. R. S. Oberoi, Chairman of Oberoi Group of Hotels, said the travel and tourism economy is likely to contract by 3.5 per cent in 2009 and expand by only 0.25 per cent in 2010.
There was a decline of 4.1 per cent in foreign tourist arrivals in September over the same month in 2008. Tourist arrivals during January-September 2009, at 35.75 lakh, were lower compared to the 38.71 lakh inflows in the corresponding previous period, says the Union Tourism Ministry Web site.
“The short-term outlook seems very gloomy as we do not see any dramatic growth in tourist arrivals, be it foreign or domestic,” says Mr Rajeev Menon, Area Vice-President, J.W. Marriott Hotels & Resorts.
Apart from the drop in inbound travellers, the poor occupancy levels are attributed to reduced corporate travelling and sagging domestic tourism. The hospitality industry is keeping its fingers crossed and hoping for the New Delhi Commonwealth Games next year to give “some kind of impetus”.
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