Hotel rooms, weddings get expensive

Hotel rooms, weddings get expensive
TEAM TOI


Hotel room rents in Bangalore are all set to burn a bigger hole in your pocket. With the government set to impose the luxury tax on rack rates (the actual printed rates of a hotel room), the burden on the consumer is expected to be 5% to 7% more than what he’s currently paying as taxes.
Guests now pay a luxury tax on actual room rents, which are 30% cheaper than rack rates. For example, if the rack rate is Rs 18,000, the actual rent charged may be only Rs 13,000 after various discounts the hotel throws in. Guests only pay a luxury tax on Rs 13,000, not on Rs 18,000. But now, guests will have to pay luxury tax on Rs 18,000.
Also, conferences at hotels and weddings at marriage halls will get dearer as a uniform luxury tax of 20% has been imposed on both. Currently, the luxury tax at star hotels for conference facilities is 12.35%.
“With these proposals, Bangalore will become less competitive compared to neighbouring destinations such as Chennai and Hyderabad,” says Mohan Kumar, GM of Taj Properties, Bangalore, and a tourism trade body member.
Taposh Chakraborty, CEO, Boutique Hospitality Consultants, says, “At a time when occupancy and average room rates of hotels in the city are falling, the impact on hotels would be double that on consumers. City hotels could see occupancy levels drop by around 10-12%.”
Another industry expert adds that people will start taking the evening flight back from Bangalore rather than stay the night.The government’s effort to earn more from the hospitality sector will not work. Bangalore’s star hotels still record the highest average room rates at Rs 15,000 as compared to Mumbai (Rs 13,100) and New Delhi (Rs 11,000).