If a holiday is not on your agenda this summer, you might change your mind after reading this article. Marred by the Euro-crisis, slowdown in corporate travel and overcapacity in the metro markets, India’s premium hotels are offering discounts of as much as 50 per cent to woo travellers through April, May and June.
While, traditionally, summer months witness lower footfalls of foreign tourists in India, domestic travellers and the MICE segment make up for it. But with the global economy reeling under a slowdown and high fares making domestic air travel expensive; hotels can’t even rely on these two segments this summer. As per estimates, corporate travel has seen a dip of 25 per cent.
Luxury hospitality this summer is thus available at ‘never-before’ rates. Sample this: Sheraton Udaipur is offering room at Rs 5,500 a night, which is half of what five star hotels typically charge in this season. Across the country, at Leela Kovalam in Kerala–which is traditionally perceived as an expensive domestic destination–you can get a room for `8,300 a night (if you book for three nights). This is almost 30 per cent lower than last year’s tariff. Starwood Hotels, which runs Le Meridien, Sheraton and Four Points in India, is offering rooms (with breakfast thrown in) at `6,499 a night. This amounts to a 30 to 50 per cent discount.
While some hotels are offering rock bottom prices, others are trying to lure travellers with freebies, such as breakfast, spa massages and complimentary entry to night-clubs, as part of a strategy to maintain occupancy. “It’s not just weak demand; the market is also soft because of the overcapacity in some locations. We are not discounting, we’re just offering some add-ons to make it attractive for travellers. However we do not see volumes dipping,” says Suresh Kumar, chief executive officer, ITC Fortune Park Hotels.
Hotel managers agree that overcapacity in the market, as international chains make a beeline for India and home-grown players expand, is playing a spoilsport this summer. Consider the numbers: in 2012, 12,782 branded rooms were added to the existing supply of 84,313 across the country; that’s an 18 per cent increase over the previous year.
“From the days when two hotels had a market monopoly, Pune as a market has seen many new properties entering the scene,” says Abhijit Chitnis, director of sales and marketing at JW Marriott Pune, which is offering a 15 per cent discount on room rates besides a complimentary game of golf, an aromatherapy massage and entry to its nightclub.
“Some leisure destinations might witness a slight increase. But we see no increase in room rates in markets such as NCR, Hyderabad, Bangalore and Chennai,” says K B Kachru, chairman, South Asia, Carlson Rezidor Hotel Group. The company’s brands include Radisson, Radisson Blu, Park Inn, Park Plaza and Country Inn & Suites.
Not everyone sees the growth as a negative. “Overall India needs more hotel rooms, but there are certain cities where demand has not kept pace with supply. This has resulted in low average room rates and occupancies,” says Veer Vijay Singh, chief operating officer, Vivanta By Taj.
In 2012, revenue per room witnessed a decline in all the cities in the country except for Goa, Ahmedabad and Kolkata. This year, occupancy in Hyderabad, Bangalore and Chennai continue to take a hit with the cutback in corporate travel. As per hospitality consultancy HVS India, occupancy in Delhi has taken a hit of 10 per cent and is averaging at 61.1 per cent; in Hyderabad, it is 54 per cent (down by 5 per cent since last year) and in Bangalore occupancy is 3 per cent lower at 57 per cent.
Not only the key business cities, leisure destinations too have been impacted as most tourists don’t want to loosen their purse strings right now. In Jaipur, for instance, occupancy stands at about 56 per cent while even Goa has not seen an increase this year. “This fiscal will be a challenging one for the industry. No wonder most hotels are offering discounts and very attractive packages. City hotels will not be hiking rates any time soon,” says Ajay Bakaya, executive director, Sarovar Hotels, which manages 60 hotels across the country.
That should make it a good summer for Indians, who can experience five-star luxury at four- or three-star prices anywhere they like in the country.