High rates erode hotel occupancy
The HVS survey covering 268 hotels revealed that high rates have resulted in emergence of an unregulated and unorganised guesthouses.
By PTI |
NEW DELHI: Driven by inflation in hotel room rates, the occupancy rate in Delhi, Mumbai, Chennai and Kolkata has declined for the first time in four years, according to a report.
The HVS survey on 'Hotels in India-trends and opportunities' has revealed that the hotel industry overall saw a 12-month average growth of 30 per cent in 2006-07 as opposed to a growth of 23.7 per cent in the previous year.
Whereas, occupancy growth, which had been 2.6 per cent in the previous year, showed a marginal growth of 0.7 per cent in 2006-07.
The continued demand-supply imbalance has led to exponential rate increases resulting in inflated room rates across key markets in the country, some of which currently rank among the most expensive hotel markets in the world.
"Research indicates that the effects of spiralling rates have already been noticed in most markets. For the first time in four years, markets have started showing a decline in occupancy," the survey said.
It said the trend resembles the period starting 1996-97 where occupancies had started to decline but average rates continued to rise for a few years thereafter.
The survey which covered 268 hotels with a total of 34,784 rooms also revealed that the high rates have also resulted in emergence of an unregulated and unorganised hotel/guesthouse sector which is witnessing a boom in cities like Bangalore, Delhi and Pune.
However, despite drop in occupancy for the four major cities in India, there was an across-the-board growth in terms of occupancy for the various market segments.
There are strong demand indicators emerging from Tier - II markets with the three-star segment witnessing highest growth in occupancy at 3.3 per cent, This was followed by the five-star category at 0.9 per cent and the five star - deluxe and four star at 0.3 per cent each.
The HVS survey on 'Hotels in India-trends and opportunities' has revealed that the hotel industry overall saw a 12-month average growth of 30 per cent in 2006-07 as opposed to a growth of 23.7 per cent in the previous year.
Whereas, occupancy growth, which had been 2.6 per cent in the previous year, showed a marginal growth of 0.7 per cent in 2006-07.
The continued demand-supply imbalance has led to exponential rate increases resulting in inflated room rates across key markets in the country, some of which currently rank among the most expensive hotel markets in the world.
"Research indicates that the effects of spiralling rates have already been noticed in most markets. For the first time in four years, markets have started showing a decline in occupancy," the survey said.
It said the trend resembles the period starting 1996-97 where occupancies had started to decline but average rates continued to rise for a few years thereafter.
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The survey which covered 268 hotels with a total of 34,784 rooms also revealed that the high rates have also resulted in emergence of an unregulated and unorganised hotel/guesthouse sector which is witnessing a boom in cities like Bangalore, Delhi and Pune.
However, despite drop in occupancy for the four major cities in India, there was an across-the-board growth in terms of occupancy for the various market segments.
There are strong demand indicators emerging from Tier - II markets with the three-star segment witnessing highest growth in occupancy at 3.3 per cent, This was followed by the five-star category at 0.9 per cent and the five star - deluxe and four star at 0.3 per cent each.
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