Nivedita Ganguly

Star hotels bring down room tariffs by 20 to 25 per cent

OR has fallen to around 50 to 60 per cent

Elections are also one of the reasons

VISAKHAPATNAM: Economic slowdown and tight competition among hoteliers has resulted in a steep fall in occupancy rates and hotel room rents, according to industry officials. The average occupancy (OR) rates at the star-category hotels in the city have fallen to around 50 to 60 per cent.

The star-category hotels that had room tariffs starting from Rs.4,000 and above have decreased their room rents by 20 to 25 per cent. According to sources, though the hotels have not officially revised their printed rates, decreasing OR and stiff competition has forced them to bring the rates down. The officials say the fall of rates would affect the business as operational costs had gone up. The recession has resulted in low occupancies and as a result, the average room rate has taken a beating of almost 30 percent. Rooms are now bundled with packages like breakfast, airport transfers or sightseeing, says a hotel operator.

The last tourist season was especially bad for the star-category hotels in the city as many corporate deals and meetings were cancelled in the wake of the Mumbai terror attacks and due to severe cost-cutting measures taken many corporate firms. Hoteliers say corporate travellers were the major source of income for Indian hotels. Unlike hotels in other Asian countries that depend on leisure travellers, the Indian hotels have a mixed clientele with corporate travellers forming a sizeable percentage. Striking a dual blow to the industry are the ensuing elections and the predictions of a hotter summer.

Losing lustre

Though many of the hotels are trying to push up their revenues by conducting events and theme parties, these have failed to pull in the crowd and added to losses. Most of these events have lost their lustre due to low turnouts. There have also been complaints of inflated bills from many tourists and visitors. “We normally do not keep a watch on the expenses during parties. But the hotel managements are taking advantage of the situation and quoting high bills after the event,” says a businessman.