Hotels, airlines tickets to pinch pockets this season

High travel and stay costs notwithstanding Indians are busy planning for the upcoming peak holiday season as hotels report a sell out and airlines prepare for a fare hike to cash in on the demand surge.

Costs have gone up anywhere between 10-50% on hotel rooms and airline tickets, against the earlier two quarters but this has not dampened travellers spirits. Hoteliers are witnessing increased flow of queries from domestic and international tourists while tour operators are reporting 20-25% increase in business.

Several premium hotels, especially those located at tourist hot spots like Goa, Rajasthan and Kerala are already reporting occupancies of more than 70% for December and January and total sell-out on certain crucial days like the final week of this year.

For instance Hotel Leela Goa, a luxury property, where the starting rates used to be less than Rs 7,000/night, are reporting a sell-out for 15 days each in December and January, with its starting price now at Rs 13,500/night. A similar trend is seen in other hotel companies too.

"We are pretty much sold out for December and January and November is also looking very good, only a few rooms at the luxury end are available. We have brought in a very marginal hike in room rates but this surely is the best period for us in the last few years", said a senior executive at Marriott.

Airline companies though are offering seats at 20-30% premium but anticipate lower occupancies due to the hike this month. As per on-line booking portals advance booking for December show a rate hike of more than double than the usual rates.

For instance, an Indigo Mumbai-Goa, one-way ticket in the final week of next month on costs Rs 4,500, as against the usual price of around Rs 3,000. This is expected to more than double next month.

A sales executive of a private airline said, "Overall bookings for the fifteen day period (pre and post Diwali) are lower compared to last year as air fares are 20-30 percent higher this season. November is beginning of the peak season for airlines and loads are higher compared to the previous quarter which is a lean season."

If airline ticket was expensive other mediums like trains and buses are not cheap either.

Private and state-owned bus operators have also doubled their fares on the Mumbai-Goa route which is now more expensive than an AC Two-Tier railways ticket. The railways are also reporting packed trains on important routes like Mumbai-Goa-Kerala with several requests running in long waiting lists.

Karan Anand, head-relationships at Cox & Kings said, "Domestic tourism is growing 20-25%. We have not seen a slackening of demand despite 10-15 percent increase in travel costs.  The traditional markets like Simla, Rajasthan and Leh-Ladakh are doing well. People are also opting for shorter holiday to beach destinations like Alibaug or Kashid".

Though hotel room rates appear costlier than the preceding months they are in fact either at par with the same period last year or have seen a marginal hike. Hoteliers have refrained from hiking rates significantly for the fear of hurting demand and also because of addition of fresh inventory.

K B Khachru, executive vice president, south Asia, Carlson Hotels, said, "Average rates are at par in the industry with that of last year. This is because more inventory has come into the market. The growth for the industry appears to be stable for the holiday season".