Fuel Prices Attack Hospitality Industry Too

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July 18 – Hotel room rates in New Delhi have dropped almost 50 percent the lowest in two years on the back of rising aviation fuel fees and an economic slowdown, the Times of India reported

"Corporates have cut travel of their executives which has affected our occupancy. Although the tariff is in the range of Rs 5,000-Rs 8,000 (US$117-187) in five-stars, they are still pretty affordable. But with airfares being where they are, personal leisure travel is becoming out of reach of the middle class," said an leading hotelier.

Hotel consultants HVS International-India's MD Manav Thadani added that the trend is likely to continue in the next 12 months. Thadani said, "There is a slight decline in occupancy levels all over India now and it will remain so in the next 12 months keeping in view the somewhat negative turn the economy has taken. The decline in room rents will be around 10%."

Almost all hotels are feeling the pinch. Federation of Hotel and Restaurant Association of India VP Rajendra Kumar said, "Rooms that were in the range of Rs 12,000-Rs 20,000 are now going for Rs 6,000-Rs 9,000. The demand — and rates — could pick up once travel season begins in September."

Sushil Wadhwa, MD and CEO of Platinum Incentives and Events Ltd that organises conventions, meetings and events for corporates, said, "Companies are cutting down on spending on travel. There is a clear cut message that executives should travel only when necessary and make do with low cost options like video teleconferencing.

People who have the facility to travel business class have been asked to take economy and group conventions and meetings have been hit by about 40%. The individual business traveller has also cut short his/her travel."