Oversupply hits hotel occupancy

Branded hotels are gasping for breath just like the economy—a sense of despair hangs over their lobbies, coffee shops and restaurants as hotel occupancy levels crashed to a decade low this year. 

More than a third of hotel rooms remain unoccupied, with the industry reporting an occupancy level of 60% this year. In the last four to six months alone, occupancy levels at hotels in the metros have dropped by a tenth, says Dinesh Khanna, executive director at Eastern International Hotels, which owns the Novotel in Juhu. To mitigate this growing crisis, hotels have had to reduce room rates by 15%, squeezing margins like never before, even as they continue to bleed at their restaurants and conference facilities. 

“You can sense it in the coffee shops and fine-dining restaurants where tables remain vacant and in the evenings when half of hotel rooms don’t switch on the lights. Companies have cut down on their executives’ travel expenses and their spending on conferences and seminars.

Full report here Economic Times 


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