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Bangalore records higher hotel occupancy rate

Our Bureau

BANGALORE, Aug. 10

BANGALORE, which is currently under the grip of forced demand and consumption compression in the wake of the two-week long stalemate on the Kannada cine star, Dr. Rajkumar's hostage issue, however, has earned some cheers for its overall performance in th e hotel sector for 1999-2000.

The city which boasts of leading brands in luxury hotels became the star performer recording an 8.4 per cent to reach an average occupancy of 66.3 per cent (59.7 per cent in 1998-99) while the leading metropolises like Bombay and Calcutta witnessed a dec line in the occupancy rate.

Mumbai saw an erosion in its occupancy by two per cent to 63.77 per cent, while Chennai's occupancy fell by 2.6 per cent to 62.6 per cent. In the case of Delhi, the occupancy remained largely flat with a negligible increase by 0.8 per cent to 61.6 per ce nt.

The Silicon City of Asia, however, could not position itself well in the race for maintaining the average room rates as its 9.1 per cent decline was the second highest after Delhi's 12.8 per cent. Chennai with 3.6 per cent and Mumbai with 6.35 per cent m anaged to stem the slide to the minimum, says a survey conducted by Pannell Kerr Forster (PKF), a consulting company.

In its recent `City Survey-2000' covering quality hotels in 52 of the most important cities in the world, spread over 34, countries, PKF said that ``protecting occupancy has clearly come at the cost of rate,'' for the Indian cities.

Mumbai at Rs. 6,290 had the highest average achieved room rate in the country, followed by Delhi at Rs. 5,239. Bangalore and Chennai followed with Rs. 4,541 and Rs. 4,402 respectively. The decline in occupancy and average room rate has compounded a decl ine in yield, or average revenue per available room (RePAR) with Delhi and Mumbai being the worst hit showing a slide of 11.65 per cent and 9.4 per cent respectively, the survey said.

The will be more supply of rooms in 2000-01, particularly in Mumbai and Delhi, the latter itself expected to account for more than 800 additional rooms this year. Mumbai will see an addition of 1,000 rooms this year, with many more to follow in the next two years.

Commenting on this, Mr. Uttam Dave, Chief Executive Officer, PKF Consultants India, said: `` I see an increasing look inward, to internal cost efficiencies, in order to protect bottomlines. Eventhough early results for 2000-01 show encouraging results th anks to a reviving economy, the overall demand-supply scenario shows that occupancies and rate will continue to remain under pressure for some years as hotels fight for market share''.

Unless measures like improving infrastructure facilities, rationalisation of taxes and pricing coupled with accelerated pace of reforms to give a boost to the economy are taken, hotels would have to do a balancing act between occupancy and realising aver age yield.