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Chapter 10

In: Business and Management

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Are High Hotel Tariffs Damaging India’s Tourism Potential?
Industry analysts fear that the current boom which the Indian hospitality industry is witnessing will not last. The prime reasons cited are steep hotel rates and shortage of rooms. Leading tour operators, in conversation with Bhisham Mansukhani and Charmaine Fernz share their opinion on this current scenario...
The Indian hospitality’s current occupancy boom, which revived the industry from its days in shambles, is now posing a serious threat to the supposedly resurgent inbound tourism sector. Inbound tour operators have unanimously cited both the steep Average Room Rates (ARRs) and shortfall in inventory as key deterrents that keep tourists from visiting India.

Ashwini Kakkar Neeraj Ghei Himmat Anand
Tour operators state that the problem is twofold, while the consequence is simply a low number of inbound tourists.
Ashwini Kakkar, CEO and MD, Thomas Cook India Ltd
“The problem is particularly serious in the metros. We are not just talking about incredibly high room rates which are disproportionate to the regional benchmark but the absolute non-availability of rooms at any cost. The implications of this in terms of the country’s economy, and Foreign Institutional Investment(FII) approach is far reaching and mostly detrimental. Our nearest and most formidable competitor, China has more than 100,000 rooms in its key industrial hub Shanghai. However India, which claims to draw parallels with it, has a paltry 92,000 rooms across the country. While in some cases, rooms available at an exorbitant cost might not deter the business traveller, there is not a compelling enough reason for tourists to spend such large sums on stay alone.
Thus, inspite of reforms on the aviation front and the Ministry Of Tourism campaign, Incredible India, inbound tourism is threatened by stagnation.”
Neeraj Ghei,...

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