It is a tale of the new tax. The New Year’s Eve demand for hotels has triggered a fourfold increase in room rates at popular holiday hot spots such as Goa. Consequently, the goods and services tax (GST) component on some of the hotels is higher than the usual tariff they command.
Take the case of the Taj Exotica Resort & Spa in Goa. MakeMyTrip is quoting a price of Rs 81,500 for a villa room with a garden view and breakfast. But this is just the hotel tariff. Expect to cough up an extra Rs 22,820 towards the GST (about 28 per cent), taking total damages to Rs 1,04,320 for a one-night stay. Book the same hotel room for a one-night stay on January 31, the tariff drops to Rs 20,700; with the GST, and the total is Rs 26,720. One can get a five/six-night holiday (for two) at popular international holiday destinations like Bali and Dubai with stay, flight, and local transfers at this price in mid-January.
Another Taj property in Goa, Taj Fort Aguada Resort & Spa, is commanding a price tag of Rs 52,200 for one night at a superior garden view room with breakfast. Along with Rs 14,840 in the GST, the total damages are Rs 67,040 for a one-night stay. Book the same hotel for a one-night stay on January 31, the tariff is Rs 13,200; with the GST, the total is Rs 17,120.
The same hotel room will be priced at Rs 21,196 on January 31; with the GST, it is Rs 27,321.
At other popular destinations like Udaipur, hotels such as Taj Lake Palace are sold out for the last day of this year. The hotel, situated in the middle of the lake, has 66 rooms and 17 suites. Eighty-seven-room hotel Oberoi Udaivilas, another prime property in the city, is also sold out. Trident, another luxury property, has none of its 137 rooms and four suites available on New Year’s Eve.
Taj Fort Aguada Resort & Spa
This December is different for the hotel and travel business, compared to last year when demonetisation had impacted travel between Christmas and New Year. Tariffs and hotel occupancies are higher for a number of hotels in key destinations like Goa, Udaipur, Jaipur, and Manali being sold out. Hotel prices have become dynamic this time, with frequent price increases in line with declining inventory.
“Hotel tariffs have become dynamic like airfare and we are seeing a day-to-day price change based on demand. I am seeing an increase of almost 20 per cent in demand, compared to last year when we had felt the pinch of demonetisation and people were busy sorting out their finances. Hotels had seen cancellations and empty rooms last December,” said Kapil Goswami, managing director at BigBreaks, an online travel portal.
Domestic destinations dominate the travel choice of Indians between Christmas and New Year. Of the top 10 destinations that Indian travellers searched for travel during this period, only two - Dubai and Singapore - were international locations, said hotel search and price comparison engine Trivago. Goa topped the list and others in the top 10 were places like Jaipur, Puri, Udaipur, and Manali.
Budget hotel chain OYO said hotel tariffs are 13-30 per cent higher year-on-year in several holiday destinations such as Goa, Corbett, Rathambore, Mount Abu, and Panchmarhi. Sharat Dhall, president at online travel firm Yatra, said December-end hotel tariffs are 50 per cent higher than off season and peak dates such as Christmas and New Year are another 30-40 per cent higher on average.