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In India, Hotel Room Rates for Airline Crews Up 60-80% in the Last Year;
Some Hotels Insisting on Annual Contracts, a Departure from
 Usual Three-to-Five Year Contracts
The Economic Times, India
Knight Ridder/Tribune Business News

May 10, 2006 - NEW DELHI -- Foreign airlines are feeling the heat of the Indian hospitality business boom. Five-star hotel room rates for airline crew has risen by 60-80 percent in the last one year, with most hotels insisting on annual contracts, a departure from usual practice of a three-to-five year relationship.

Even while raising their rates, most hotels have maintained or reduced their exposure to crew guests over the last one year, while a few have simply put out the "not welcome" board for airline crew. This comes at a time when a growing number of foreign carriers are increasing their flight frequency while expanding their reach from the country.

With too many airline crew chasing fewer number of discounted hotel rooms, the situation is reaching a state that some airlines flying short haul -- from destinations in South East Asia and the Gulf -- are thinking on lines of avoiding crew stay in some Indian metros like Bangalore, Delhi, and Mumbai, and opt for quicker turnaround with an extra-set of crew manning the services in the return leg.

"Our pay out for cabin crew stay in Delhi have more than doubled over the last two years," said Manjit Grewal of Singapore Airlines. "If the room rates reach unsustainable levels, we may opt for turnaround with additional crew," said the India head of another south east Asian airline.

On an average, each international flight generates demand for 10-12 hotel rooms for the crew. As per industry estimates, Delhi and Mumbai generate demand for over 8,000 hotel rooms per week from foreign carriers.

Airlines have always enjoyed negotiated rates for crew stay that are better than those derived by corporates. Till two years back, airlines used to bargain for up to 60 percent discount on rack rates. This has now fallen to 40-50, with rates getting re-negotiated annually. "It is a simple case of demand and supply.

Though we value them as source of bulk and steady business, airlines have to become more realistic about rates, especially when average room rates have reached a new high," according to a senior executive from Delhi-based Intercontinental The Grand.

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To see more of The Economic Times, or to subscribe to the newspaper, go to http://economictimes.indiatimes.com

Copyright (c) 2006, The Economic Times, India

Distributed by Knight Ridder/Tribune Business News. For information on republishing this content, contact us at (800) 661-2511 (U.S.), (213) 237-4914 (worldwide), fax (213) 237-6515, or e-mail [email protected].


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