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Full Articles

 

 

31. Cost Cutting: Executives Opt For Mid-Priced Hotels

26 August, 2008

 

With corporates cutting down on expenses due to inflation, executives have no choice stay away from five star hotels while on tour. Mid-priced hotels are cashing in on the opportunity. Virgin Mobile is one of the few companies which has been on a cost cutting drive since April this year.

 

"As we are a start-up company having operations in a highly competitive field (mobile services), it became imperative to go in for a cost optimization drive," says Pravin Patree, head-facility , Virgin Mobile, India. He says the company issues 230 tickets every fortnight and employees mostly travel to metro cities like Mumbai, Bangalore and Pune on work.

 

"Earlier, most executives stayed in five-star hotels but now people in the middle and junior management who are out of town for longer duration on projects mostly end up staying in nofrills hotels."

 

"We are witnessing some movement wherein guests who earlier prefered to stay in fivestar hotels are now opting for mid-priced ones," says Sandeep Gupta, executive director, Choice Hotels. While tarrif rates for top end chains are upwards of $300 for a night, the corresponding figures for mid-priced hotels range from $75 to $200 for a night.

 

Rahul Pandit, vice president, operations, The Lemon Tree Hotel Company, says, "The shift of deluxe hotel users has contributed an additional 10% occupancy premium to our hotels during the last quarter."

 

Pandit says that Lemon Tree properties across India have delivered 3% occupancy premium and double digit RPAR (revenue per available room) growth compared to last year. "This growth has also been buttressed by the value conscious business and conference traveller and we are delivering aggressive value for money packages to our retail clients."

 

Patree of Virgin says the switch over from five star to nofrill hotels has resulted in cost savings to the tune of 20%-25% on a month on month basis. "As most of them work long hours, they are keen on having a decent accomodation nearby and a sumptuous breakfast the next morning before heading out again."

 

While those mid-tier properties located in business zones are witnessing high occupancies, those located in leisure and religious destinations aren't far behind.

 

 

 

32. Hotels To Hike Tariffs From September By 50%

15 August, 2008

 

Come September and major hotels across cities like New Delhi, Bangalore and Hyderabad will hike tariffs by 10-50%. Thanks to a steady tourist inflow, most hotels have decided to go ahead with a rate revision next month when their financial year begins.

 

According to government estimates, foreign tourist arrivals rose 7.4% in July over the last year. With domestic tourism also generating good business, industry feels that major hotels are trying to cash in on the supply-demand mismatch.

 

"Occupany rates have gone up since last September and is expected to continue this year.

 

The next couple of months would also witness an increase in leisure travellers," said Knight FrankIndia national director (hospitality and leisure) Shreenath Shastry. In most big cities the Oberoi Group usually takes the lead in tariff revisions.

 

The new rates at its Bangalore property may touch Rs 19,000-19,500. The hotel may go for another round of hike in October when the tourist season begins. The second and third-highest increase in percentage terms are The Oberoi in Delhi followed by ITC Delhi.

 

Tariffs for the Hyatt Group of Hotels are market-driven and hence not fixed. The hotel is, too, expected to go for a hike next month.

 

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