The Q1 results hint that the Indian hospitality industry may have to face gloomier times ahead. The average hotel room rates for 2012-13 are expected to fall five to 10 per cent and the occupancy is likely to come down five per cent, compared with the previous financial year, industry experts say.

This will take the occupancy and room rates of the hospitality industry closer to the levels during the economic crisis of 2008 and after. While occupancy this financial year could see the first fall in growth after 2008-09, room tariffs may touch the lowest so far in the past five years as per a report in Business Standard by Ruchika Chitravanshi.

The report suggests that the nation wide hotel average rate now is Rs 6700, a decline in 1.4% over the average rate that was previously at Rs 6800 last year. Five years back, the average rate was Rs 7989. The increase in occupancy has been minimal on the other hand from a 68.8% five years back to 69%.

Hospitality major EIH, which operates the Oberoi and Trident brands of hotels and resorts, reported 38.83 per cent dip in net profit at Rs 9.45 crore for the quarter ended June 30, due to decline in sales. "The hospitality industry’s performance is directly related to economic growth and investor confidence. Unfortunately, the economies on which we depend are shrouded in uncertainty," said P R S Oberoi, chairman, Oberoi Group, at the company's annual general meeting.

Another leading hospitality firm, Indian Hotels Co (IHC), which runs the Taj group of hotels, reported a net loss of Rs 33.4 crore for the quarter ended June, compared with a loss of Rs 22.3 crore in the corresponding quarter last fiscal.

In the first quarter itself, hotels across segments have witnessed a fall in the occupancy levels by 10 per cent, which has deterred them from revising the average room rate. "The crisis is worse than in 2008-09. Not only is the economic sentiment low, but the additional inventory has also made things more difficult for hotels," said Arjun Sharma, managing director, Le Passage to India.

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