Luxury hotels see steep fall in room rates in "13

The five-star and four-star hotel room rates in India witnessed a steep drop in prices in 2013 compared to the previous year. Both Delhi and Mumbai respectively saw a 12 per cent and seven per cent drop in five-star room rates.

According to online accommodation booking website Hotels.com, a part of Expedia group, Hotel Price Index (HPI) data shows that hotel guests paid an average two per cent more for their accommodation in 2013, compared to 2012, to a national rate of Rs 6,278. The average price of a hotel room around the world rose by three per cent year-on-year in 2013 while it saw two per cent jump in India.

Although the rupee fell 12 per cent during the first 11 months of 2013, there was not a corresponding rise in the number of inbound visitors. “There was still growth of four per cent but this was less than recent years. Local airlines had to increase air fares to compensate for the impact of the currency devaluation and the rise in oil prices. The calamitous floods that struck Uttarakhand in June also badly hurt tourism in the state’s pilgrimage locations,” the report said.

“The domestic market currently accounts for around 82 per cent of tourism revenues and, in a bid to boost tourism and business, the government has decided to extend the country’s limited visa-on-arrival scheme from 11 to 180 countries. The loosening of the stringent visa rules is expected to unleash the huge potential in the local tourism industry, which currently welcomes far fewer visitors than many of its Asian neighbours. This change should come into effect later in 2014. Looking at the impact of these factors on hotel prices paid in India during 2013, there were mixed results. Among the major changes, Goa recorded a healthy rise of nine per cent to Rs 5,927 and three destinations all saw a four per cent rise: Calcutta to Rs 6,433, Bangalore to Rs 6,215 and Cochin to Rs 5,290. However, Chennai lost eight per cent to Rs 5,897, Hyderabad dropped seven per cent to Rs 5,509 and Pune was down five per cent to Rs 5,243,” it added.

Looking at the averages paid by hotel guests from India in 5-star and 4-star accommodation, there were some considerable falls at this level during 2013 which means luxury was available for a little less for many travellers.

Abhiram Chowdhry, vice president, APAC of Hotels.com, who co-authored the report pointed out, “Asia recorded some of the highest drops at the 5-star level. Hong Kong tumbled 40 per cent to Rs 20,202, Guangzhou was down 17 per cent to Rs 9,812. Delhi lost 12 per cent and offered the best deal on 5-star accommodation for an average price of Rs 9,652 a night and Mumbai saw a seven per cent fall to Rs 9,809. Sydney also fell 12 per cent to Rs 15,755. The picture was similar in the 4-star range, this time with Delhi on top, losing nine per cent to Rs 6,555, with Mumbai down six per cent to Rs 7,010 while a five per cent drop took Tokyo to Rs 12,279 and Beijing down five per cent to Rs 6,680.”

In the five-star range, there was a Rs 29,252 gap between the highest and lowest average prices paid by travellers from India for a single night’s accommodation. At the top of the list on Rs 38,904 was New York, followed by Singapore on Rs 24,822, with London in third place on Rs 24,672.

In four-star category, an average price of Rs 6,555 in Delhi and Rs 7,010 in Mumbai were still competitive. It was still less expensive on average to stay in a 4-star hotel in Delhi than a 3-star property in 24 popular destinations such as Tokyo on Rs 7,554, Singapore on Rs 8,832 or Paris on Rs 9,430, or even two-star in London on Rs 6,876, San Francisco on Rs 8,155 and New York on Rs 9,966.

For the more budget-conscious, Beijing offered the lowest two-star prices with a very affordable Rs 1,571 with Delhi on Rs 1,749 and Bangkok on Rs 2,025. Mumbai was slightly higher on Rs 2,846.

Hospitality analyst Rashesh Shah of ICICI Direct, said, “There has been no growth in the past 3-4 years in this segment and the luxury properties faced most from this global economic slowdown. While Budget and mid-market properties continued to do well thanks to pricing and location, the same did not happen in favour of many luxury properties. For instance, a 260-room luxury property in Delhi with a capex of Rs 1,200 crore has reduced its room rate from Rs 25,000 a night to Rs 14,000 a night at present.”

soumonty.kanungo@mydigitalfc.com

Luxury hotels see steep fall in room rates in "13