Hoteliers will consider taking government suggestion on slashing room tariffs by 10-15 per cent in the face of difficult situations for the tourism industry arising out of the global economic crisis.
Representatives of leading hotels including Taj Ambassador and Leela Group met Tourism Secretary Sujit Banerjee, who asked them to consider reduction in room rents.
"They (hoteliers) will consider the guidance given by the Tourism Secretary regarding room tariffs and formulate their response as soon as possible," the Tourism Ministry statement said here.
The delegation of the Federation of Hotels and Restaurants Association of India (FHRAI) raised demands during the meeting with the Tourism Secretary.
These included infrastructure status for hotels, delinking hotels from real estate and liberal rules for external commercial borrowings.
They also described the building norms like the Floor
Area Ratio (FAR) of the Urban Development Ministry as difficult as meeting them would result in high development charges.
The hoteliers also wanted relaxation in FAR for their properties in the Lutyens zone in New Delhi.
The government feels that there is a scope for reduction in room tariffs, especially in the metropolitan cities.
According to industry sources, room rentals in five star and super deluxe categories were Rs 18,000 onwards before the economic slowdown.
However, with credit crunch hitting the industry and corporates resorting to cost cutting, the correction has set in room charges.
"November is generally a month of one hundred per cent occupancy. But in this season, slackness has set in to the extent of 20 per cent," says L K Malhotra of the Delhi-based Crowne Plaza Hotels.
Malhotra said the main reason for high hotel rentals was the prohibitive cost of land that is auctioned by the civic authorities. "If you (government agencies) sell land for Rs 500 crore, you cannot expect hoteliers to give a room for Rs 5,000", he said.
The Tourism Secretary called the meeting to assess the impact of global meltdown on the tourism industry in the country at the initiative of Tourism Minister Ambika Soni.
"Some more meetings with stakeholders in the tourism sector are slated in the next few days," the ministry said.
Vivek Nair, Vice Chairman of Leela Group, Rajindra Kumar of Hotel Taj Ambassador, Salim Sherwani of Sherwani Hospitalities and Sunil Gulati of Uttarakhand Hospitality attended the meeting. FHRAI Secretary General Harish Sud was also present.