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Low occupancy, less footfalls add to hotel biz woes

January 21, 2009 15:12 IST

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Have you lately hesitated to take your family for a dinner in the favorite restaurant or put off the plans to next week? Well, you are not the only one. With the recession and terrorist attacks in the air, there is a marked change in the 'eating out' attitudes of people, causing worries to the hotel industry.

And then there are serious concerns on the falling occupancy.

With these signs of waning appetite, the hotel industry plans for lesser number of food festivals and chalking out strategies to whet the appetites of their patrons again.

"With global meltdown and terror attacks last year, the journey through the year 2009 is not really going to be very smooth. We suffered a loss of over 40 per cent during the New Year celebrations. The impact of recession would reverberate for at least 6 months from now," says Vijay Pandey, President, Hotels and Restaurant Association of North India.

M.P Purushothamam, chairman, Federation of Hotel and Restaurant Association of India, says, "There is a problem and we are resolute to handle it. We may reduce the tariffs, the average room rates are also expected to decline  and we will have to offer more discounts and introduce more offers to allure people."

Stressing on the importance of food promotions in attracting customers and building the brand image of hotels, Pandey says, "Hotel industry is very keen to go for promotions and festivals but at this moment, promotions cannot be the  prime priority as we need to recover through all the losses we have had till now and also take care of security problems that are still the major concern unresolved."

However, some ventures in the hospitality sectors feel that the recession has not affected them yet.

Anjali Chatterjee, GM Marketing, The Lalit, New Delhi, says, "We didn't suffer a big setback due to the recession as of now because our bookings are done 5 or 6 months in advance. We expect February to be okay for business. The summer season is expected to witness a decline in business due to recession."

Adding that the 26/11 Mumbai terror attack is more a concern to the industry than recession, she says, "It is 26/11 which brought home difficult times for the hotel industry.

There was a noticeable dip after the terror attack. Our yield per room as well as occupancy levels came down."

President of 'World Association of Chefs Societies', chef Manjit Singh Gill says, "Generally there is a good turnout at cuisine festivals. Recession, however for sometime brought the business down. The general percentage of people came down for a brief period. We are working to get the business back on track and are successful to a great extent."

Daniel, Head of 'Catering care', which offers a multitude of services in the hospitality sector, attributes many reasons to the dip in business.

"There is no doubt that we had a drop in the business from the last 3 to 4 months. Security to the guests topped the chart apart from recession and other reasons," he says.

The effect of recession has not only been felt by five star hotels and restaurants. Even the roadside eateries have been hit by it.

A roadside eatery owner in South Delhi, says, "My business witnessed a fall from the last many months. After the last year terror attack, the strictness of the police around has led to sudden fall in the business."

The rising number of restaurant and hotel goers every year, increased the trend of food promotions and festivals and now with a drop in the turnout after the meltdown, there is a slash in the food festivals and promotions, industry sources say.

At the onset of 2009, situation demands the initiation of measures to tackle the adverse effects of the meltdown on every sector, the hotel industry in India is both worried and determined to face it, Purushothamam says.

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