News: Indian hospitality gets expensive

(DNA 24/11/2006) Kolkata - The world over, India is increasingly being viewed as an overpriced hotels market on account of the gross demand-supply mismatch. And the situation is expected to worsen.

According to HVS International, which tracks hospitality trends worldwide, some first-class and mid-market hotels in India charge huge room tariffs despite the fact that their services are way below global standards.

Bangalore is a classic example of a city turning away much of its MICE (meetings, incentives, conventions and exhibitions) travel and airline demand. Hyderabad is another city where it is pointless to have convention centres since hotel rooms with reasonable rates are not available.

Manav Thadani, managing director, HVS India, said: “Rates are already 50% higher than what they should be.”

He added: “Some mid-market hotels are currently charging $200-300 compared with say $100-150 overseas.”

An industry insider said: “Hotels are high-priced, especially in October-January.”

Navjit Ahluwalia, vice-president, Marriott International, said: “Whenever there is a scarcity, the product will sell at a premium.

The Courtyard, a full-service, four-star Marriott brand commands as much as $400-500 per room nights in New York while the super premium Ritz Carlton room tariff is as low as $100 in Kuala Lumpur, which has a greater number of hotels than New York.”