Indian hotels find Re more charming than dollar

Come September, most of the hotel chains in India will switch to single rupee pricing policy.

With the global weakening of dollar against the rupee making a dent in revenues, hotels across the country have decided to charge their domestic and international customers in rupee.

The rupee has appreciated nearly 8 per cent against the dollar since January.

Barring the international hotel chain Hyatt, which introduced rupee pricing in 2005, hotel chains including the Taj, The Oberoi, Le Royal Meridien, ITC Welcomgroup Hotels and Resorts, The Leela and The Orchid Hotel, have been following a dual tariff system.

"The single rupee system will certainly help us curtail losses. And with our competitors too seriously considering the shift to a single tariff structure, we would be switching to the same from October," said Stephane Fabregoul, general manager, Le Royal Meridien (Mumbai).

Indian Hotels, the operator of Taj Hotels Palaces and Resorts, and ITC Welcomgroup Hotels and Resorts too have decided to adopt a universal rupee tariff across its properties in India.

"There have been a lot of factors that have made us look into the issue including the rupee appreciating against the dollar in recent times. This is also a rational step in view of the global scenario, where all the other countries charge customers in their local currency," said Anil P Goel, the CFO of Indian Hotels.

Hotels say that with over 60 per cent of the guests at five-star hotels being foreigners, it makes sense to have a single tariff policy than charging them in dollar, euro or pound. The move will not only facilitate customers paying in INR but also provide the hotels a hedge against the further appreciation of the rupee.

"We have made our commitments to various agents for the next one year. Since we are also associated with Starwood Hotels and Resorts, it is a corporate decision for us. The process will be put in place in the next one month," said Anil Malik, general manager, ITC Hotel, The Grand Central, The Luxury Collection.

However, Hyatt had moved to single currency pricing as a non-discriminatory and transparent pricing policy in 2005. "Our decision to switch over to a single tariff system was a strategic one. We analysed our customers, and changed our pricing policy based on their needs and requirements," said Dhruva Rathore, area director (sales), Hyatt Hotels and Resorts, South Asia.

Earlier, since a strong dollar benefited the hospitality industry, most of the hotels had resorted to the method of dual tariff. In general, the room rent in dollar terms has usually been 9-25 per cent higher than the rupee rent. For instance, when Rs 45 was equivalent to a dollar, a $100 rent would fetch Rs 4,500. But with the dollar at Rs 40 at present, the same rent would fetch only Rs 4,000.