Hotel room rates go up in India
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Hotel room rates go up in India

Demands are expected to shoot up by 15 per cent in 2006, which might result in the shortage of over 10,000 rooms.

india Updated: Jan 23, 2006 01:40 IST

India is facing a severe shortage of quality hotel rooms, whichhas led to a dramatic increase in the room rates.

The shortage of rooms in hotels meeting Western standards has led many hotels in Bangalore, Chennai, Goa and Mumbai to demand a three-week advance notice for bookings.

The shortage of rooms has been caused by a combination of increased business activity and leisure travel within the country and tourists from abroad, said Manav Thadani, who heads the Indian operations of HVS, a hotel consulting firm.

The rates in Bangalore hotels had shot up last year by more than 20 per cent, said Manav.In New Delhi, the rates had risen by almost 50 per cent.

The current average room rent in quality hotels has gone up to Rs 10,000 in Bangalore. In Mumbai, the country's financial capital, it costs about Rs 5,000 for a night in a good hotel. In New Delhi, the average rate is about Rs 6,000.

"While the overall demand for hotels is going up by 10-15 per cent annually, there is a large demand and supply gap which will only widen," Thadani said.

"The year 2006 will be undersupplied by up to 10,000 rooms," he warned.

India's Tourism Ministry said that arrivals had risen by 13.2 per cent in 2005, and is expected to grow by 15 per cent this year.

The boom is also reflected in the growth of India's aviation sector in recent years after it was opened up to private carriers as part of a broader government liberalisation programme in the early 1990s.

The competition has brought down fares and, in the process, attracted more passengers. Aviation officials expect the number of fliers to grow from around the current 20 million a year to around 50 million in 2010.

First Published: Jan 22, 2006 23:06 IST