Hotel room rates at an all-time high

New Delhi: Airfares may be cheap, but hotel rates are getting steep! Five star hotels have done record business this year with average room rates in Mumbai touching Rs 8,500 a night.

Peak rates for hotels have gone up to Rs 16,000 a night in Mumbai.

That's almost a 35 per cent increase over last year. Hoteliers say that this is not only because people are traveling more for business but also because they are staying a bit longer.

GM, ITC Grand Maratha, Anand Rao says, "The rates have increased only marginally. They have gone to just above two nights from about one-and-a-half nights."

But this was only in Mumbai where occupancies went up by a marginal 8 per cent to 10 per cent.

So while you may get a room, albeit an expensive one in Mumbai, the situation in Delhi, Bangalore and Kolkata was even worse as there weren't any rooms available in the better hotels.

And though frequent travelers say that people may be staying longer but most of them do not opt for five star rooms, the fact is that even hotels that are not five-star have hiked up their rates.

Bangalore has seen peak room rates of over 20,000 rupees a night and in Delhi peak rates have touched the Rs 18,000 mark.

Kolkotta has been a surprise package this year with average room rates of over 7000 rupees almost Rs 2000 more over last year.

Director Sales, Grand Hyatt, Jaideep Khanna says, "This trend will continue till April and then there will be a shoulder period. Come September 2006, however, and the tariffs will go up again."

While an increase in economic activity and more holidays have contributed to the price rise, the fact that hotel rooms are just not available has also led to a hike in rates.

2005 saw an addition of only about 2000 room across the country. That’s not significant considering that the hotel industry has been growing at over 20 per cent for the last two years and breaking its own record every year.

In 2006 too, one will see a only a marginal increase inventory and hence a similar price hike.

This will continue till the industry sees beyond short-term profits and catalyses the process of creating enough room for everybody.