Bengal needs more budget hotels

Written by Rohit Khanna | ROHIT KHANNA | Kolkata, Jul 30 | Updated: Jul 31 2007, 05:36am hrs
West Bengal is facing an increase in demand for rooms for the night in the budget hotel segment owing to an increase in flow of tourists.

Rajesh Mishra, president of the Federation of Hotel & Restaurant Associations of India, said the flow of tourists into West Bengal is around 1.23 crore per year. According to the ministry of tourism, inbound traffic for West Bengal was 1.13 crore in 2003.

Going by a conservative estimate, hotels in the state, including five-stars, can cater to 20 lakh tourists a year. Five-star facilities accommodate 3.8 lakh tourists, while budget hotels take care of the rest.

Of the total inbound tourist traffic, 30% needs accommodation. "This creates a huge demand for budget hotels with a rack rate ranging from Rs 1,000 to Rs 2,500 in the state," said Mishra.

Apart from leisure and corporate travel, there is a significant growth in the MICE (meetings, incentives, conventions and exhibitions) segment. According to industry estimates, hotels in Kolkata have registered occupancy of almost 77%, as against 74% in Mumbai and 73% in Chennai.

"Almost 10 lakh tourists visiting the state per year need to be catered to," Mishra said.

Hotel and Restaurants' Association of Eastern India has 460 member hotels in the region, 142 of which cater to a total of 20 lakh tourists per year.

Vikash Bafna, chairman of Big Boss Palace Pvt Ltd, said: "There is a huge demand for budget hotels in the state. We have already invested Rs 35 crore to set up a three-star hotel in Kolkata."

Big Boss recently ventured into the hospitality industry with a 48-room hotel located in central Kolkata. It has lined up Rs 160 crore for the next two years to set up a five-star hotel in the city and a 400-acre resort at Mandarmuni near Digha.

According to HVS International, a US-based hotel consulting and valuation company, average room rates (ARR) in Kolkata have increased by 20.7% from Rs 2,210 in 2004-05 to Rs 2,668 in 2005-06.