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A shortage of rooms is to blame. "Supply is simply
not keeping up with demand," said Jan D. Freitag, vice president
for global development at Smith Travel Research. "So hotels can command
premiums for any rooms they can sell."
India has only about 100,000 hotel rooms nationwide,
roughly the same number as in New York City, though India has seven or
eight times the number of tourists. As a result, hotel rates in India
will continue to grow in 2008.
An increase of "up to 35 and even 40 percent in
the coming year," would not be unrealistic, said Priscilla Campbell,
an analyst for American Express Business Travel, "especially at upper-tier
properties in major gateways such as New Delhi and Mumbai."
The phenomenon of rising prices is not confined to India
alone. From New York to Asia, and just about every desirable destination
in between, the prices of rooms, especially at hotels and resorts favoured
by luxury and business travellers, are expected to rise significantly,
sometimes in the double digits, analysts say.
Situation is acute in traditional high-cost cities like
New York where room rates rose 15.4 percent last year to an average of
$320.87.
Relief is on the way, though not in the immediate future
for Indian hotels, reveals the research. India is in the midst of an ambitious
plan to add some 75,000 hotel rooms before the end of the decade, nearly
half in the luxury sector.
"These places are prepping for additional supply,"
Ms. Campbell said. "So we can plan for some eventual easing for prices."
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