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If you are planning to take a holiday, this might be the time. Going forward, hotel room rate prices are likely to rise further, according to industry players. Hotel room occupancies improved between the month of June and July significantly and, in fact, is now well above pre-COVID levels.
In an interview with CNBC-TV18, Sanjay Sethi, MD and CEO of Chalet Hotels and Amit Jaiswal, CFO of Royal Orchid Hotels discussed demand trends, occupancy levels and the overall business outlook for the hospitality sector.
The average room rates have spiked due to travel opening up and "revenge tourism" seeing demand spiking through the roof. For Royal Orchid, the average room rate seen in the first quarter of this financial year was the highest in the last 10 years.
“We have seen the highest ARR in last decade in the first quarter and we are hopeful that in Q3 and Q4, there can be an upward movement of ARR by 10-15 percent further,” said Amit Jaiswal.
What's more, rates might be as high as 30-40 percent more next year when compared to pre-pandemic levels.
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“Next year looks like quite a phenomenal year on the rate growth front with most of the hotel companies targeting RFP rates at 30-40 percent higher than the pre-pandemic rates,” said Sanjay Sethi.
Just a week back, the Union Cabinet, chaired by PM Modi, approved the enhancement in the limit of the Emergency Credit Line Guarantee Scheme (ECLGS) to Rs 5 lakh crore, which comes as a relief for the pandemic-hit hospitality and related sectors.
For the entire discussion, watch the accompanying video