Delhi hotels are experiencing dramatic price hikes due to a demand-supply gap
A demand supply mismatch, a large-scale event later this month and an ongoing wedding season are causing a wild fluctuation in hotel room rates in Delhi.
Following a muted December and January, hoteliers in Delhi are pinning their hopes on the AI IMPACT Summit to be held in Delhi from February 16-20 that is expected to see several high-profile attendees. Luxury and upper upscale hotels in Delhi are either sold out or close to getting sold out, while others are charging whopping rates.
As per rates published on a popular travel platform, a night’s stay at The Imperial hotel in Delhi on February 16 will cost Rs 197,049 plus Rs 35,469 in taxes. The Hyatt Regency Delhi will charge about Rs 50,000 while The Leela Palace Delhi charges Rs 78,000 including taxes. The Shangri-La Eros hotel in Delhi is sold out for February 18 but a night’s stay on February 16 will cost Rs 89,000 including taxes.
“We are expecting full occupancy on select dates, driven by the high demand from city events and the AI summit. We are nearly at a sold-out situation for February 19 and 20,” said Vineet Kapoor, hotel manager, The Lalit Suri Hospitality Group, New Delhi. “There is strong demand across all room types including suites. We will be hosting several international leaders and delegates during the summit,” he added.
KB Kachru, president of Hotel Association of India said a demand supply gap in the luxury and upper upscale segments ahead of large-scale events leads to dynamic pricing in markets such as Delhi.
“There is a dramatic variance and fluctuation in rates ranging from Rs 18,000 for an upscale hotel to over Rs 1 lakh in the luxury segment,” a hotelier familiar with the matter said.
Hoteliers said December and January were muted for hotels in the national capital compared to other markets. “As per industry estimates, Delhi hotels in the branded segment saw a revenue per available growth of 10% compared to 20% in quarter four for markets such as Hyderabad and Bengaluru,” said a hotelier working for a luxury chain.
“Business was also impacted in December and January due to high pollution levels. Companies also seem to be cutting back on their GCC expansion here due to such concerns. We also saw a dip in international visitors, particularly US nationals,” he added.
Prices are up by about 30-50% due to the AI Summit compared to other dates in February, said Davinder Juj, general manager, Eros Hotel, New Delhi. “Business in December and January has been a bit softer than expected. Revenue per available room growth has not met the levels seen in some other markets,” he added. “We are adjusting our strategies to drive revenue in the coming months.”
ET reported in April 2024 that given a lacklustre addition of supply over the past 10 years compared to markets such as Mumbai, Bengaluru and even Agra and Udaipur, and a similar situation being foreseen ahead, hotels in Delhi run the risk of running out of rooms or becoming unaffordable in case of big-ticket events.
Following a muted December and January, hoteliers in Delhi are pinning their hopes on the AI IMPACT Summit to be held in Delhi from February 16-20 that is expected to see several high-profile attendees. Luxury and upper upscale hotels in Delhi are either sold out or close to getting sold out, while others are charging whopping rates.
As per rates published on a popular travel platform, a night’s stay at The Imperial hotel in Delhi on February 16 will cost Rs 197,049 plus Rs 35,469 in taxes. The Hyatt Regency Delhi will charge about Rs 50,000 while The Leela Palace Delhi charges Rs 78,000 including taxes. The Shangri-La Eros hotel in Delhi is sold out for February 18 but a night’s stay on February 16 will cost Rs 89,000 including taxes.
“We are expecting full occupancy on select dates, driven by the high demand from city events and the AI summit. We are nearly at a sold-out situation for February 19 and 20,” said Vineet Kapoor, hotel manager, The Lalit Suri Hospitality Group, New Delhi. “There is strong demand across all room types including suites. We will be hosting several international leaders and delegates during the summit,” he added.
KB Kachru, president of Hotel Association of India said a demand supply gap in the luxury and upper upscale segments ahead of large-scale events leads to dynamic pricing in markets such as Delhi.
“There is a dramatic variance and fluctuation in rates ranging from Rs 18,000 for an upscale hotel to over Rs 1 lakh in the luxury segment,” a hotelier familiar with the matter said.
Hoteliers said December and January were muted for hotels in the national capital compared to other markets. “As per industry estimates, Delhi hotels in the branded segment saw a revenue per available growth of 10% compared to 20% in quarter four for markets such as Hyderabad and Bengaluru,” said a hotelier working for a luxury chain.
“Business was also impacted in December and January due to high pollution levels. Companies also seem to be cutting back on their GCC expansion here due to such concerns. We also saw a dip in international visitors, particularly US nationals,” he added.
Prices are up by about 30-50% due to the AI Summit compared to other dates in February, said Davinder Juj, general manager, Eros Hotel, New Delhi. “Business in December and January has been a bit softer than expected. Revenue per available room growth has not met the levels seen in some other markets,” he added. “We are adjusting our strategies to drive revenue in the coming months.”
ET reported in April 2024 that given a lacklustre addition of supply over the past 10 years compared to markets such as Mumbai, Bengaluru and even Agra and Udaipur, and a similar situation being foreseen ahead, hotels in Delhi run the risk of running out of rooms or becoming unaffordable in case of big-ticket events.
