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Hotel bookings soar as lean season begins

Bipin Chandran in New Delhi | April 29, 2004 08:57 IST

Occupancy rates at hotels across India are sizzling this summer -- traditionally the "lean season" that begins in April and runs through July -- touching a decade high of 80 to 90 per cent.

And to top it, average room rates have also increased by about 10 per cent, spurring analysts and industry officials to predict a 15-20 per cent rise in bottom lines.

The numbers stand in stark contrast to the average occupancy of about 55 to 60 per cent clocked in April last year, according to the Federation of Hotel & Restaurant Association of India. Hotels expect the trend to continue well into the coming summer weeks.

Says Abhijeet Mukherjee, sales manager, Taj Hotels, New Delhi: "We are seeing improved occupancy in various hotels of our chain. Besides, with demand on a high, we also expect higher average room rates from our properties."

Occupancy at the Taj Mahal in Delhi is at 83 per cent as on date against 77 per cent the same time last year. Similarly, Taj Palace, the group's other property in the capital, is clocking 82 per cent occupancy compared with 75 per cent last year.

Besides, both hotels have also seen their average room rates increase by about 13-16 per cent.

"If the average room rate is up by about 15 per cent and occupancy is up by about 10 per cent, the overall growth in the topline would be about 20 per cent," said Pradeep Kalra, vice president, marketing, Jaypee Hotels.

The scene is no different elsewhere. Mumbai currently has an average occupancy of about 75 per cent and some hotels are holding on to their peak season tariff, which is also about 40 per cent higher than last year.

The ITC Grand Maratha at Sahar in Mumbai has seen occupancy soaring by 50 per cent to 75 per cent. "There is no reduction in room rates compared with the peak season and we expect the summer season to clock about 30 per cent more occupancy compared with last year," said Deepak Haskar, general manager, Mumbai, ITC Hotels, which runs the super deluxe property.

And Bangalore hotels have trumped peers across other cities in terms of occupancy -- it was at 95 per cent in the weekdays during April. The weekend occupancy in Bangalore is about 70 per cent. "Bangalore is benefiting due to the BPO sector boom," said Suresh Kumar, vice president (south) ITC Hotels. The room rates in India's Silicon Valley ranges between Rs 7,000 and Rs 10,000 in the top of the line category.

Chennai and Hyderabad hotels are registering occupancy rates of about 70 per cent  -- bookings are up 5 per cent in Chennai and 15 per cent in Hyderabad.

The growth in Chennai is despite a significant addition of rooms over last year. The room rates in both the cities hover around Rs 5,000.

For the New Delhi-based Jaypee chain, the occupancy rate increase has been quite phenomenal. The group's average occupancy rate across its various properties have gone up to 84 per cent in April this year against 59 per cent last year.

Even standalone hotels like the Imperial in New Delhi is seeing surge in occupancy. Imperial in April this year has an occupancy rate of 85 per cent, compared to 55 per cent last year.

"Average room rate will be the same in spite of the dollar devaluation by 10 per cent. Thus, we have an actual increase of 10 per cent on a year on year basis," said Rishi Kapoor, director, strategic planning, Imperial.

According to Kapoor, over the last fiscal year, the occupancy for The Imperial has gone up by 14 per cent as against the city increase of 12 per cent in the Year 2003-04.

"Again, over the last fiscal year, the average room rate for The Imperial has gone up by 10 per cent this year. This compares with the rate increase in the city at 7 per cent," said Kapoor.

Besides, companies expect the summer to be a better season this year against the previous months.

According to Jaypee's Kalra, the chain's property in Mussoorie has seen increased booking this year compared to last year. In addition, the group's other properties in Delhi and Agra are seeing an increase in business travelers and expects the lean season occupancy to be about 10 per cent higher than the previous year.

"The next few months are good, even though it is lean season, and we will beat last year's revenue and our budgets," said Kapoor.

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