Rising hotel tariffs rings in boom for hospitality industry

Rising hotel tariffs rings in boom for hospitality industry
New Indian Express

BANGALORE: It's not just the cost of hotel rooms going through the chandelier, the increasing demand has encouraged major global hospitality players to set up shop amidst the green environs of Bangalore City.

While a study by Business Travel International, a travel management company, pegs the City's tariff rate for an overnight stay at a staggering 147.83 pounds (roughly Rs 12,000) _ an unbelievable third highest in the world _ the reality is that the IT city is globally connected with multinationals of every hue looking to invest here.

"There is a certain buoyancy in the economy which is bringing in corporate travellers,'' P.K. Mohan Kumar, Area Director Taj Group, Bangalore and Managing Director, Taj West End told this website's newspaper. ``A huge demand for hotel rooms is a positive reflection of the local economy,'' he adds.

As investors look for a pot of gold in Bangalore, they are willing to pay. And industry here is upbeat as it translates into better business opportunities. Already, three big international names are planning a foray -- Shangrilla, Hilton and Marriott.

This is a tectonic shift in the business as so far the star hotels here were being managed by Indian companies _ now these global players are landing here. The infrastructure in this sector is set to increase by at least 800-900 rooms in the next 18 months, an industry analyst said.

In the City, there is an inventory of 1,524 hotel rooms and collectively the nine most popular hotels have an occupancy of 76.5 percent every year. This despite the average room rate of Rs 10,315 per night, up by Rs 2,786 over the previous year. The hotel industry expects the tariffs to go up by at least another 30 percent during the peak season next year.

But hotels like The Park say they are not overpriced. ``We are a competitive business hotel. The price factor depends on the dynamics of the industry. We feel our services are worthy of the price,'' Preeti Kumar, Guest Relations Officer, The Park Hotel, said.

In the Garden City, it's not just value for money. The rates are increasing as the savvy traveller expects more and always compares services with the global expectancy level.

"We offer world class product and services. Eight out of 10 people who stay in any one of the nine Bangalore's star hotels say service and hospitality here are world class. We are willing to go the extra mile and there is more value delivery,'' says Mohan Kumar.

There is also a simultaneous growth in the number of service apartments where the City is hosting the long-stay market. An increase in their numbers is no threat, says an industry insider, and they are not expected to eat into the growing segment of business travellers. Their competitive prices would not erode the market as they cater to a different set of clientele, asserts another hotel manager.