Most hotels agree to scale back rates for Delhi games

Hotel bookings for the Commonwealth Games (here, in October) are set to be thrown open for tourists in the next few days, as the face-off between hotels and the tourism ministry on room rates has been largely resolved.

Hotels in the National Capital Region were seeking much higher rates than what the tourism ministry thought were appropriate to attract tourists.

“We intend to open bookings in the first week of March," said Lalit Bhanot, secretary general of the Games’ Organising Committee (OC). Bookings are being overseen by the Games Travel Office (GTO), headed by Le Passage to India, a leading tourist agency. The GTO would be listing about 125 hotels across various price categories for tourists.
 

WOOING GAMES TOURIST
Hotel category	Average rate now	Earlier proposed
5 Star (Deluxe)	Rs 12,000	Rs 23,000
5 Star (Standard)	Rs 10,000	Rs 14,000
4 Star (Deluxe)	Rs 8,000	Rs 14,000
4 Star (Standard)	Rs 7,000	Rs 10,000
3 Star	Rs 3,500-5,000	Rs 5,000-7,000
Source: Federation of Hotels and Restaurant Associations of India

“The government has reached an agreement with the hotels that 90 per cent of the rooms available with them will be with the OC for the purpose of the Games,” said Bhanot.

Many hotels had raised the rates they proposed to charge in October, to make up for the revenue losses that suffered due to the slowdown in the past few quarters. “Hotels got into a profiteering mode, thinking there would be a lot of demand during the Games. So, if they are offering a rate of $150 right now, then for the Games they are quoting a rate of $350, which is not healthy,” said Arjun Sharma, chairman and managing director of Le Passage to India.

While many hotels had agreed to lower rates, some are not willing to budge. "We are still talking to them," he said.

“The hotels which do not comply with the rates would not be part of the list offered by the GTO," he said. Though tourists are free to make independent bookings with hotels, they get a lower rate if they book through the GTO. Hotels are also keen to be part of the GTO, as they expect to then get a better response from travellers.

“We are going to charge a 15 percent mark-up on the price being offered by the GTO for travellers who come to us directly," said the president of the Federation of Hotels and Restaurant Associations of India (FHRAI), Rajinder Kumar.

The Association has also sought exemption from luxury tax during the Games. "We are requesting the government to exempt the luxury tax for all tourists. Presently, the exemption is only for officials,” said Kumar.

The Games are scheduled from October 3 to 14. Presently, hotel reservation on the commonwealth website is open only for athletes and officials.

The government had allocated Rs 2,069 crore in this year's Budget to the Ministry of youth affairs and sports for the Games, against Rs 2,883 crore in 2009-10. In the original bid document of May 2003, the Games were projected to generate a surplus of $45.58 million (Rs 210 crore). The total expenditure involved was estimated at $266.65 million (Rs 1,225 crore), to be financed mainly by sale of residential flats (Rs 490 crore) and grants (Rs 530 crore). Beside surplus from operating the Games, revenue was to be generated from sponsorship fee, sale of international and host broadcasting rights, merchandise licensing income and sale of tickets.