Planning a 5-star stay? Be ready to shell out more

Bangalore: If you are planning to check into a 5 star hotel this winter - be prepared to shell out anything between Rs 10,000 -15,000 a night. Luxury hotels are once again cashing in on the short supply of rooms in the country.

This year the escalation in tariffs is expected to be between 5-10 per cent against the over 20 per cent increase seen over the last 3-years. Some markets like Bangalore and Delhi, could see a marginal or no increase in tariffs this year.

That’s because 5 star hotels in some markets are already seeing a plateauing of growth. Occupancies in some markets have begun dipping.

“One hasn’t seen a negative growth but there is a flattening out in markets like Bangalore and Hyderabad. May be because new inventory has come in,” said Raymond Bickson MD, Taj Hotels.

Industry experts say - 5 star tariffs have started pinching even corporate clients who are now reducing their lengths of stay. For instance people visiting Bangalore and Mumbai are now staying on an average for a day and a half as against two or two and a half days.

Also the unorganized sector offering rooms at Rs 3,000- 8,000 a night is beginning to boom. Here In Bangalore there are over 1,000 rooms in guest houses and service apartments and this is likely to go upto 3000 room by next year. Most corporates now seem to be opting for these for longer stays.

“Because rates have gone beyond a certain level - a lot of travelers have started using the unorganized sector. Therefore a lot of demand that would traditionally go to 5 star hotels is going to smaller hotels and guest houses,” said Manav Thadani MD, HVS International.

Experts say - over the next two years tariffs in almost all places will begin to see a downward trend. That’s because a lot of new capacity will come into most cities in the next 2-3 years

But Mumbai could be an exception since prohibitive land prices are discouraging hoteliers and there isn’t too much new capacity currently getting built. For all other metro cities a 5 star hotel may become more affordable next year.

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