In India, Kolkata (formerly known as Calcutta) has not traditionally been synonymous with upscale hotels. But thanks to an influx of branded hotel rooms, that could change. The city is set to double its number of five-star rooms by the end of the calendar year, with the openings of a Westin and a JW Marriott slated for November.
According to the Economic Times, market experts predict a 10- percent to 15-percent drop in average daily rate in the city from the present rate of Rs7,000-8,000 per night. "While all other major metropolitan cities have seen a supply pressure, the east has never faced such a situation,” Achin Khanna, managing director of consultation and valuation practice at HVS South Asia, told the paper. “For the first time, there will be oversupply and competitive pricing will continue for the next year. While the number of guests to the city will not increase immediately , the hotels will try to make for the loss on rentals from the food and beverage and banquet marketing.”
The new rooms would likely target business travelers who have already stayed in Mumbai, Hyderabad and Delhi and are seeking something new. With both increased supply and demand, the city’s occupancy rates could rise above the current average of 70 to 75 percent.
“Low supply is the primary factor for high occupancy in five-star rooms in the city,” said Rishi Jain, executive director at Jain Group, which is bringing Holiday Inn to Kolkata this year. “There have been instances in peak seasons when guests pay up to Rs20,000 for a room in one of the city's five-star properties. With more number of keys in the segment, the peak seasons would not burn a hole in the pocket.”