It's party time for hoteliers

Hoteliers have never had it so good. The revenue per available room, which is the true index of a hotel's business, has risen sharply in the last one year at key destinations, including Mumbai and New Delhi, says a study conducted by hotel consultancy HVS International. The revenue per available room has gone up in spite of a substantial addition to hotel rooms.

The study covered five-star/deluxe hotels in seven destinations: Mumbai, New Delhi, Bangalore, Chennai, Goa, Hyderabad and Kolkata. It noted that all centres, except Kolkata, witnessed a rise in the revenue per available room during April-August 2003 from the same period of the previous year. It declined in Kolkata by 13.8 per cent because of the huge increase of 53.4 per cent in the availability of rooms.

Bangalore emerged at the top of the list with a 49.9 per cent increase in revenue per room to Rs 3,871 in April-August 2003 from Rs 2583 in the same period in 2002, despite a 10 per cent addition to room supply.

This happened because while the occupancy increased to 82 per cent from 63 per cent during the period, even the average room rate increased 29.4 per cent to Rs 4750. HVS International said the hoteliers there could expect windfall gains during the current year and until new supply entered the market in the next three years.

The HVS International report also points out that the occupancy levels have climbed significantly at most of these centres during the first five months of the current financial year.

While Mumbai, New Delhi, Bangalore, Hyderabad and Chennai witnessed a rise in occupancy ranging from 15.2 per cent to 29.4 per cent, Kolkata and Goa saw a decline of 5.9 per cent and 9.4 per cent, respectively. "High occupancy rates are expected to push the average rates sharply over the next six months in these cities and are expected to stabilise in Delhi and Mumbai," the report adds.