5 star hotel tariffs crash again - Chennai Hotels
CHENNAI: Five star hotels have been opening at such a rapid pace in the city that supply has outstripped demand and sent tariffs crashing. Luxury now cost as little as 4,500 a room per night.
Three new five-star hotels have brought an additional 1,300 rooms to the city's existing 2,000-room inventory, and the increased competition has caused luxury room tariffs to fall by about 15% in four months.
While the official tariffs range from 12,000 to 17,000, the realization rates don't go beyond 7,000, and the rest is considered cash discount, according to an industry source.
CHENNAI: Five star hotels have been opening at such a rapid pace in the city that supply has outstripped demand and sent tariffs crashing. Luxury now cost as little as 4,500 a room per night.
Three new five-star hotels have brought an additional 1,300 rooms to the city's existing 2,000-room inventory, and the increased competition has caused luxury room tariffs to fall by about 15% in four months.
While the official tariffs range from 12,000 to 17,000, the realization rates don't go beyond 7,000, and the rest is considered cash discount, according to an industry source.
Cash discounts apart, offers like stay-two-nights-get-one-night-free are doing rounds in five-star hotels in Chennai, India. "Tariffs fall further during weekends and rooms are given away at any price the customer demands, sometimes even 4,500 a room night," the source said.
"Hotels are left with no choice but to reduce tariffs since rooms will not find takers at the original, high rates. Hotels that have just added new rooms cannot go empty and need to find ways to cover costs," said The Accord Metropolitan general manager Rupesh Pandey.
Occupancy levels too are falling, with corporate executives cutting down on travel due to the economic slowdown. "Chennai used to maintain occupancy levels of 72% but this has fallen to about 60% over the last six months," a source said.
Premium five-star hotels that inaugurated their properties recently were betting on the MICE (meetings, incentives, conferences, exhibitions) segment, but rates have fallen there too. Organising a conference for a group of 50 people cost about 900 a person a few months ago, but prices have come down to 650 a head in hotels like Accord Metropolitan and about 750 in premium hotels like Le Royal Meridien and The Park, according to the spokesperson of an industry body.
Premium five-star hotels that inaugurated their properties recently were betting on the MICE (meetings, incentives, conferences, exhibitions) segment, but rates have fallen there too. Organising a conference for a group of 50 people cost about 900 a person a few months ago, but prices have come down to 650 a head in hotels like Accord Metropolitan and about 750 in premium hotels like Le Royal Meridien and The Park, according to the spokesperson of an industry body.
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