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2016 Q3 HRS Hotel Price Radar: To raise alarm for India’s Bengaluru hotel room rates increase

November 5, 2016 Hotel Trends No Comments Print Print Email Email

The booming economy, ease of doing business and new launches of airline routes to various parts of India has caused both weal and woes for the country. As the government developed more infrastructure to facilitate businesses, standard of living has also increased and in the hospitality space, the average room rate in parts of India has also been going higher.

Of the markets studied in the APAC region excluding Greater China, Bengaluru, India experienced the highest increase in hotel rate development followed by Singapore, with 16.2% and 1.2% respectively as compared to a year ago in Q3 2015. While Sydney, Australia reported flat performance, other “business popular” cities reflected decrease. Bangkok has the most significant dip at 9.1%.

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The HRS Hotel Price Radar looks at per-night hotel room rates and is reflective of hotel reservation needs in a market during a specific time period and consequently, the destinations where companies are channelling their corporate travel budgets. The data obtained is based on hotel bookings made by over 40,000 corporate clients – including global players from Fortune 500 companies such as Google, China Mobile, Hitachi, Huawei, Alibaba and Panasonic, via the HRS hotel portal in the third quarter of 2016.

The results and analysis further ascertain the robust and significant growth in India, pushing and making its stand as the top 10 markets in business travel as per Global Business Travel Association (GBTA). Corporate spending is also forecast to increase – more than three quarters of Indian firms predict a significant rise in their travel and expenditure budgets in 2016, according to East & Partners Asia’s Asia Corporate T&E Index.

“Insights indicate that business travel in the India has increased significantly. With the increased airline routes to various parts of India, it is expected that the number will only continue to climb.” commented Emmanuel Ebray, Managing Director for HRS. “We are educating the corporations in India and helping them manage the high costs in room rates and guiding them on how to achieve higher costs savings yet not jeopardize the safety and other needs of the travellers.”

Starting early 2016, Scoot introduced new direct connections from Singapore to Chennai, Amritsar and Jaipur while Korean Air has just announced last week that they will be launching direct connections to New Delhi from Seoul. This will only lead to the market being more competitive.

Likewise for several other countries, the most recent terrorist threats by militant group ISIS to India is unlikely to affect business travel.

While India is experiencing higher room rates year on year, cities like Bangkok saw the biggest dip at 9.1%. The Bangkok bombing in August 2015 resulted in dip of 17% tourist arrivals and the warnings of bomb attacks may have caused a downward spiral through the months. However, business travel continues. The drop in hotel bookings from the leisure segment has benefited corporate travellers with lower room rates.

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