Scorching heat sends tourists to the hills, and hospitality firms are loving it

Many five-star hotels are fully booked, as summer vacations begin. For June, the uber-luxury Oberoi-run Wildflower Hall in Shimla is charging 41,000-45,000 per night for a regular room, roughly 50-60% higher than the usual rates for the month, with at least three nights already sold out.

Varuni Khosla
First Published9 Jun 2024, 03:12 PM IST
Popular destinations include Kashmir, Leh-Ladakh, Uttarakhand, Himachal Pradesh, the northeast, Coorg, Munnar, Coonoor, and Wayanad.
Popular destinations include Kashmir, Leh-Ladakh, Uttarakhand, Himachal Pradesh, the northeast, Coorg, Munnar, Coonoor, and Wayanad.(Basit Zargar)

New Delhi: As the sweltering summer heat intensifies, hotels in the hills are experiencing a boom, with several companies reporting a 30% increase in occupancy and soaring revenues.

Many five-star hotels are fully booked, as summer vacations commence across the country. For the entire month of June, the uber-luxury Oberoi-run Wildflower Hall in Shimla is charging 41,000-45,000 per night for a regular room, roughly 50-60% higher than the usual rates in June, with at least three nights already sold out. The top suite at the same hotel is priced at approximately 1.9 lakh per night. Similarly, the Six Senses Vana in Dehradun is retailing for 95,000 per night, including taxes.

Popular destinations include Kashmir, Leh-Ladakh, Uttarakhand, Himachal Pradesh, the northeast, Coorg, Munnar, Coonoor, and Wayanad. This surge in demand is also driving up airfares, even though many travellers prefer driving. For instance, Delhi outbound airfares to destinations like Darjeeling have increased by 7-25% compared to June 2023. Bagdogra fares have risen by 25%, Dharamshala, Shimla, Manali, and Srinagar by 16-17%, and Coonoor, Coorg, and Munnar via Coimbatore by about 8%, data from Thomas Cook India showed, while online travel agency Yatra Online Ltd. has seen an uptick of 10-15% in airfares to nearby airports serving hill stations like Shimla, Manali, Coorg, Munnar and others.

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Daniel D’Souza, president, and country head for holidays at SOTC Travel, said, "Our online searches for hill station hotels have jumped by over 50% compared to last year for locations such as Shimla, Manali, Coorg, Darjeeling, and Gangtok. This travel demand has significantly increased hotel occupancy by approximately 30%, with room tariffs rising 8-15%."

The company noted that hotel prices have increased in areas such as Darjeeling (10-14%), Coonoor, Coorg, and Munnar (5-14%), and Dharamshala, Shimla, and Manali (8-12%). Srinagar also saw a similar 12% increase for both 4 and 5-star properties. There is strong demand from young professionals, with a surge in last-minute and impulse bookings, and a high interest in outdoor-adventure experiences among couples, DINKs (double income, no kids couples), groups of friends, millennials, and Gen Zs.

Thomas Cook India is also seeing a significant demand surge of over 30% for cooler destinations due to the intense heatwave in Delhi-NCR and surrounding regions. The company has reported increased interest in short breaks and weekend getaways of 2-3 nights, as well as longer stays of 7-15 days or more. With most travellers starting their holidays later this year due to voting in their constituencies and the extreme weather, the company expects this demand to continue through mid-August.

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Nikhil Sharma, managing director and area senior vice president for South Asia at the Radisson Hotel Group, said that amid the current heatwave, many travellers are opting for quick road trips to hill stations. Radisson hotels in Dharamshala, Pahalgam, Kufri, Sonmarg, Srinagar, Manali, and Mussoorie have seen a 15% year-on-year growth in occupancy, with average daily rates rising to 18,000 or more per night. "Travellers generally prefer a mix of luxury and mid-segment accommodation for their 3-5 day stays, engaging in activities both within and outside the hotels," Sharma noted.

A spokesperson for Marriott International told Mint that their current trends are positive, with hill resorts experiencing a 7% increase in average daily rates over last year and a 10% rise in revenue per available room (RevPAR). The company's travel trends, and pace are "favourable" compared to last year, with occupancies exceeding 75%, and the increased demand is being optimized by the company.

Sarovar Hotels & Resorts reported an occupancy growth of 10-15% for June at its hill properties compared to last year, with an average increase of 12-15% in average daily rates across its properties in May. Projections for June indicate a similar growth, with increased business in Bhimtal, Dalhousie, Manali, Shimla, and Srinagar. Similarly, Lemon Tree Hotels has seen an uptick in bookings for hotels and resorts in Jammu & Kashmir for May, with higher average room rates and occupancies than last year, a trend expected to continue into June. Their Gangtok hotel has also reported better occupancies than last year, and the company has recently opened hotels in Manali, Mcleodganj, Sonmarg, and Kasauli.

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The hills' gain has been a loss for warmer locations. While hotel rates have shot up in cooler climes, cities in Rajasthan, for instance, are seeing a huge drop in hotel rates. Brands like Radisson, Devi Ratn, Jaipur – IHCL SeleQtions, Intercontinental in Jaipur for instance, are between 18-55% lower than their regular room rates. Even regions in Uttar Pradesh, like Agra, have seen a big drop in rates and some cancellations from travellers. The Oberoi Amarvilas, for instance, is quoting 20-30% lower than its usual hotel rates.

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First Published:9 Jun 2024, 03:12 PM IST
HomeIndustryScorching heat sends tourists to the hills, and hospitality firms are loving it

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