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Hotels, airline tickets set to pinch pockets this season

Swaraj Baggonkar & Aneesh Phadnis/Mumbai 11 Nov 12 | 12:16 AM

Amid the approaching holiday season, hotels are reporting sell-outs and airlines are preparing to raise fares to cash in on the surge in demand.

Though prices of hotel rooms and airline tickets have risen 10-50 per cent, compared to the previous two quarters, this hasn’t dampened spirits. While hoteliers are recording a rise in queries from both domestic and international tourists, tour operators are reporting increases of 20-25 per cent in business.

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Several premium hotels, especially those at tourist hot spots like Goa, Rajasthan and Kerala, are already reporting occupancies of about 70 per cent for December and January, along with sell-outs for the last week this year. For instance, Hotel Leela Goa, in which room costs earlier started at Rs 7,000 a night, has reported sell-outs for 15-day periods in December and January, despite the fact that room costs now begin at Rs 13,500 a night.

“We are pretty much sold out for December and January. November is also looking very good; only a few rooms at the luxury end are available. We have brought in a very marginal rise in room rates. Surely, this is the best period for us in the last few years," said a senior executive at Marriott.

Though airline companies are offering seats at 20-30 per cent premiums, they anticipate lower occupancies due to the fare rise this month. According to on-line booking portals, advance bookings for December show prices are more than double the usual rates. For instance, an Indigo Mumbai-Goa one-way ticket for the last week of the year costs Rs 4,500, against the usual price of about Rs 3,000. This is expected to rise next month.

A sales executive of a private airline said, “Overall bookings for the fifteen-day period (pre- and post-Diwali) are lower compared to last year, as air fares are 20-30 per cent higher this season. November is the beginning of the peak season for airlines and loads are higher compared to the previous quarter, which is a lean season."

Tickets for trains and buses are not cheap either. Private and state-owned bus operators have doubled fares on the Mumbai-Goa route, and these tickets are now more expensive than AC two-tier railways tickets on the same route. The Indian Railways has reported packed trains on key routes like Mumbai-Goa-Kerala.

Karan Anand, head (relationships) at Cox & Kings said, “Domestic tourism is growing 20-25 per cent. We have not seen slackening demand, despite a 10-15 per cent increase in travel costs. Traditional markets like Shimla, Rajasthan and Leh-Ladakh are doing well. People are also opting for short holidays to beach destinations like Alibaug or Kashid."

Though hotel room rates are higher than in the preceding months, they are either on a par or only marginally higher than in the year-ago period. Hoteliers haven’t raised rates significantly, owing to fresh inventory and concern raising rates would hurt demand.

K B Khachru, executive vice-president, south Asia, Carlson Hotels, said, “Average rates in the industry are on a par with those last year. This is because additional inventory has come into the market. For the holiday season, the industry’s growth appears to be stable."

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