Many hotels are offering discounts with monsoon offers on hotel bookings to bag more customers in the lean season. Over 20% off on reservations for July-September can be availed on destinations like Goa, Bangalore, Agra, Jaipur, and many others.

While the story is expected to remain much the same in metro cities, destinations like Goa, Kerala have managed a good monsoon season. The occupancy level in Goa’s Vivanta by Taj has shot up to 85%. In contrast, its hotels in Delhi NCR are hovering at less than 60% occupancy as per a report in Business Standard.  

“In a slowdown situation, people become very cautious about the spending. People trade down on hotels to save money, so the hotels in premium, midmarket segments stand to gain. Also domestic tourism has grown and lapped up the offers and discounts,” said Veer Vijay Singh, chief operating officer, Vivanta by Taj. 

Due to poor business sentiment, companies cutting costs on travel the gateway cities including Delhi, Mumbai, Hyderabad, Chennai and Bangalore the impact on occupancy and average room rates has been more severe than the leisure destinations. 

According to a study by Federation of Hotels and Restaurant Association of India (FHRAI) the occupancy in Delhi has gone down by 6% on a year on year basis and the average rates are down by 11%. One can easily book a luxury hotel in August in the capital for Rs 10,000 today. This is a significant drop compared to the rates of Rs 15-17,000 last year which itself was a period of struggle for hospitality industry. 

 

The biggest challenge for the hotels has been the steep and persistent drop in the revenues per available room (RevPAR). As per the FHRAI study the RevPAR dropped by 10% for the hotel sector in March 2013 over corresponding period last year. “It is a tough situation, on one hand occupancy and rates have fallen and on the other the costs have increased. Hotels have to take steps to manage their costs better,” said Patu Keswani, managing director, Lemon Tree Hotels.