When Saibal Sen, Director IMP Pvt Ltd Pune, who travels abroad every five weeks on business wanted to put up some of his foreign guests in a city hotel, he was in for a shock. Not only were most of the hotels full, but none of the five-stars quoted a rate less than Rs 14,000 per night, even after company discount.
“We were amazed at the cost. When we travel to the US we get a five-star hotel booking for $ 100, while in Europe the Novotels, that are easily comparable to our four and many five stars, cost around 150 Euros a night. As far as the Far East is concerned in China their best seven stars are available for less than $ 100. In Thailand we always stay at Dusit Thani at $ 150 per night,” said the businessman who finally had to put up his guests at a city hotel for an astronomical Rs 18,000 per night. In other words, it cost them $ 450 a night. With the huge demand outstripping the current supply of rooms, tariff rates in the city have seen an unprecedented escalation over the past two years. This has put Pune hotels in the category of among the most expensive in the country and in many cases, the world.

“Pune hotels are definitely amongst the most expensive in the country,” said Pali Anand, former president of the Poona Hoteliers Association and owner of Hotel Tej Regency who credits the changed fortunes of the hospitality industry to the huge business influx into the city. According to research and consultancy firm HVS Hospitality Services, average room rates across all-star category in the city rose by 30 per cent last year.

According to Arun Nayar, president Poona Hoteliers Association and director operations Pride Group of Hotels, along with the demand-supply gap, what has contributed to the skyrocketing tariffs is the fact that putting up a hotel in India is a very costly proposition given the land and construction prices. “This has made Indian hotels amongst the most costly in the world,” said Nayar.

He added however that Mumbai, Delhi and Bangalore were ahead of Pune in the rate race. But a cursory survey of Pune rates reveals that the city is really not very far behind, if not right up there already. Hotel Le Meridian, the city’s biggest five-star has an average rack rate of Rs 20,000-22,000 per night at present, even as the Taj Blue Diamond’s tariff card starts with Rs 17,000 for a base room and goes up to Rs 25,000 for suites.

“But these are rack rates and not the actual prices the hotel gets after giving discounts. They are much less,” said a Taj Blue Diamond source, though he agreed that the western counterparts would probably be giving similar discounts for their clients too.