AN OVERSUPPLY of hotel rooms has caused a price war among hotels in Jaipur, with rates in three- to five-star categories dropping by 20 to 25 per cent over the last three years, according to Le Passage to India Tours & Travels executive director Khalid Khan.
Golden Tulip Jaipur general manager Shailesh Joshi explained that three- and four-star properties were forced to reduce rates whenever five-star properties dropped their prices.
Joshi said he was sustaining rack rates at his hotel (about US$50 to US$75) by targeting more corporate business, which is year-round, compared to leisure business, which tends to be seasonal.
While the better prices benefit the consumer, Khan said rates in Jaipur and India as a whole were still relatively high compared to countries such as Thailand, Singapore and China, which offer similar category hotels at lower rates, and where destination marketing is better.
According to Khan, staying in a standard four-star property in Jaipur costs around US$150 to US$200 per night, whereas staying in a four-star property in Singapore sets you back around US$70 to US$90 per night.
Over the next 18 months, Jaipur’s inventory is expected to increase by another 2,500 rooms, with the opening of eight new hotels. The destination is also gearing up for more MICE business, as some of the new properties will be equipped with MICE facilities. A large, new convention centre that can accommodate up to 5,000 delegates at Sitapura Industrial area in Jaipur will also be ready by 2013.
Inbound agents are split over the potential impact of these new developments on hotel rates.
Sita general manager Rajasthan Sanjay Sharma was of the opinion that rates would drop further. “Business will improve, but rates are uncertain to go up. The MICE business cannot be counted on 365 days,” he said.
Khan, however, said the international hotels opening in the near future would be conducting their own destination marketing, creating more awareness and resulting in an inflow of business, which would in turn result in higher rates.
Creative Travel senior manager Lalit Bhatt said: “I am optimistic business will come back. By winter 2012, provided there are no calamities in India, rates in Jaipur will go back to pre-recession levels.”