Hotels plan to switch back to dollar rates for foreigners

The depreciating rupee seems to have made the dollar more charming for hotel chains in India.

Many chains are planning to switch to charging their customers in dollars.

The rupee has fallen around 13 per cent against the dollar since May, the worst such slide in Asia.

'No windfall gain'

“We are not following a dollar tariff, so there is no windfall gain with the rupee depreciating.

"Given that concerns about the rupee remain, hotel chains are considering switching back to dollar tariff,” said a senior official from the Leela Kempinski hotels.

Leela had already gone in for a dollar tariff for charter operations at its leisure properties.

In 2007, when the dollar was on a weak wicket, international as well as domestic hotel chains in India had decided to charge their domestic and international customers in rupees.

That policy could now be changed, with the rupee in reverse gear.

“Everyone is looking at ways to grow their top line.

"Rupee depreciation is an opportunity to cash in on and given that we do not see the rupee appreciating any time soon, moving back to dollar tariff is an option,”

said a senior official with Trident hotels.

Hotel chains are hoping that with rupee depreciating, India has become a more affordable tourist destination, and the tourist inflow could go up.

About 60-70 per cent of guests at five-star hotels are foreigners.

Hotels say if the dollar remains at this levels, the mix could change.

“There will be more value accretion for international travellers coming to India and for Indians going abroad,” said Ranju Alex, general manager, Goa Marriott Resort and Spa.

K B Kachru, chairman of Carlson Rezidor Hotel Group in South Asia, said the group will have to see how the currency behaves from here on.

“At present, we have a mixed structure, which contains both US dollar and rupee denominated payments,” he said.

Rupee depreciation has escalated costs for hotels by up to 20 per cent.

“Food and beverage provisions that are imported have become more expensive. This may prompt speciality restaurants to revise their menus,” added the senior official from Leela.

Hotels, however, are not looking at revising room rates immediately.