A report by real estate consultant Knight Frank has predicted that the average room rates (ARRs) of hotels in Bangalore might dip from Rs9,386 per room this year to Rs7,620 per room in 2012.
Dr Samantak Das, national head – research, Knight Frank, says this would happen because demand for rooms will not be able to keep pace with the supply.
According to Das, many new hotel properties that were planned during the boom time in 2007-08 will release inventories into the market between 2011 and 2013. This, in his view, will bring down the occupancy rate (percentage of rooms occupied) of hotels in the city from 61% to 44% in 2013, pulling down their ARRs.
The Knight Frank survey indicates that the number of rooms demanded in upscale category will increase from 2163 in 2010 to 2883 in 2013. Though, in reality, close to 3800 rooms are expected to come into the market.This will skew the demand and supply equation.
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