Not so lavish: Hotels are seeing a dip in wedding business after note ban

Not sure of demonetisation but more weddings organised at smaller scale: Chief executive officer

Weddings have been less lavish this year — a trend that can be linked to demonetisation. Leading hotel brands have seen a dip in business from weddings in the first half of 2017 as families turned cautious about spends after the government withdrew old Rs 500 and Rs 1,000 notes from circulation on November 8, 2016.

“We have seen our business from weddings soften during the first six months of 2017, compared to last year. I am not sure if this is an outcome of demonetisation, but we have seen more and more weddings being organised at a smaller scale. The spends are definitely on a decline and the number of bookings have also come down,” said Raj Rana, chief executive officer (South Asia) at Carlson Rezidor Hotel, which has a network of 86 hotels in India under brands like Radisson and Park Plaza.

Rana said weddings used to see attendance of 350-400 guests on average last year. But the number of guests are now down 20-25 per cent in most cases. “There is more transparency on the wedding spends since demonetisation,” he added.

Ashwin Moodliar, head of marketing at ITC Hotels, said, “The January-March quarter was relatively soft versus the same period last year. While there has been a sense of cautious optimism, we have not noticed any significant change in customer buying behaviour.” 

He, however, added that the overall business had been “comparatively better” in the April-June quarter which saw more number of auspicious dates versus supply. 

The combination of fewer guests at weddings and the liquor ban (imposed by a Supreme Court order for hotels and all vends within 500 metres of national highways) in March was adversely affecting the food and beverage revenue of hotels, said Rana. 

By inviting fewer guests, the wedding budget can come down by around Rs 200,000-250,000 as the cost of food per guest is in the range of Rs 2,000-2,500 at popular branded hotels. “Liquor service is not a ritual across all social functions and thus tends to impact only select occasions,” said Moodliar. 

While being an important part of the F&B revenue, weddings do not have a significant impact on the occupancy of hotels with the exception of destination weddings. Therefore, the branded hotels are expected to sustain the trend of occupancy improvement. Average occupancy rates are estimated to have hit a nine-year high of 65 per cent in FY17, bringing cheer to the industry. Occupancy rates have increased for the fourth consecutive year in FY17.