- HAI backs higher hotel rates.
- Delhi rates rose 90 percent.
- Tier-2 and tier-3 cities drive growth.
Hotel rates in Delhi rose by as much as 90 percent during the recently concluded 18th BRICS Summit. Rohit Khosla, HAI vice president and Indian Hotels Co. Ltd. executive vice president linked the increase to higher demand during major events and said it is not specific to India, PTI reported.
“If there is a major international event, hotel prices go up because of the demand-supply gap. We accept certain surges as normal, but when hotels do it, it becomes an eyesore,” Khosla said.
Khosla compared hotel pricing with the aviation industry, where fares rise during long weekends and holiday periods and referred to hotel rates in New York, Singapore, London and Paris. Indian hotels still charge less than properties in those markets, despite rising land and payroll costs, and pointed to the United Nations General Assembly in New York, where hotel rates also rise sharply during periods of high demand.
Khosla also pointed to growing hotel demand in tier-2 and tier-3 cities as land becomes harder to find in major metros. He highlighted mid-market and value hotels as the fastest-growing segments, with these brands adding rooms faster than luxury chains.
HAI called on state governments to provide the benefits promised after granting tourism industry status. Implementation has not kept pace with the announcements in most states, with Rajasthan being the exception. Industry status can reduce operating costs, lower utility tariffs and improve access to institutional financing.
KB Kachru, HAI president and Radisson Hotel Group chairman of South Asia, said HAI was not asking for subsidies or special benefits, but for the benefits already announced by the state governments to be provided.
“Seventeen states have declared tourism as an industry, and all associations worked hard for it. But the real benefits of industry status have come only from two states,” Kachru said.
Panelists highlighted better connectivity as key to tourism growth. They pointed to 50 new tourist destinations, UDAN and last-mile infrastructure as ways to expand tourism beyond the five or six states that receive about half of India’s tourist traffic.
Kachru also noted that the hospitality industry is prepared for the new labor code and already follows the existing labor laws.
Recently, ICRA projected India’s hospitality revenue to grow 7 to 9 percent in fiscal 2026-27.
