Poor Occupancy Forces Hotels To Offer Discounts

Global recession appears to have dealt a body blow to the hotel industry, as leading deluxe hotels across the country are offering discounts in the region of 20-50 per cent on room rates to push occupancy.

The Taj, for instance, is offering a single occupancy superior room at $120 in Kolkata, whereas the standard rack rate is around $230. Single occupancy superior rooms in The Taj Mahal Mumbai are available for $160, while at the Taj President it is $115.

In Delhi, the rate for a similar room is $150 at The Taj Mahal, while at the Taj Palace it is $130. Tariffs in terms of rupee, too, have been slashed by a similar margin, a Taj spokesperson said.

A Taj spokesperson said: "We offer discounts in our properties at tourist destinations -- say in Rajasthan -- to push sales. But in metros such as Kolkata, Delhi and Mumbai, where the main occupants are businessmen, we do not normally offer heavy discounts. This time though the discount is unusually high."

An Oberoi sales officer promptly offered a discount of about 20 per cent on rack rates for rooms in Kolkata, Mumbai, Delhi and Bangalore. In Kolkata, a superior single occupancy room is available for Rs 5,200 against a standard rack rate of Rs 6,500.

For an overseas guest, the rate is $185 (as against the standard rate of $225), which includes a complimentary meal. In Mumbai, Oberoi is offering sea-facing single occupancy rooms at $205, in Delhi at $215 and in Bangalore at about the same rate as in Kolkata. The rent in Indian rupee is even lower. In Mumbai, for instance, it is Rs 6,800, in Delhi Rs 7,200 and in Bangalore Rs 5,400.

An Oberoi spokesperson said the company was offering 15-20 per cent discount in the low season to push sales, adding that the overall occupancy of all properties combined was around 60 per cent.

However, she had earlier said that due to the recession in Europe and the US, EIH Ltd, the company which runs the Oberoi chain of hotels, was apprehensive that sales in this fiscal could be depressed.

About 60 per cent of EIH's revenues come in foreign currency, and 80 per cent of its guests are businessmen. Of this, 55 per cent of revenues come from room rents, and 35 per cent from food and beverages. The break-up is more or less same for all the hotel chains of its stature.

"Most of our overseas guests come from the US, UK and western Europe. Inflows of business travellers may take a hit due to the recession, but we are hopeful that we will manage to compensate the loss by promoting our properties at the tourist destinations," the Oberoi spokesperson had said.