The Highs & Lows Of Mumbai’s Five-Star Segment

While 2004 ended on a promising note with Mumbai’s five-star segment enjoying over 80 per cent occupancy, hotel performances in the initial months of 2005, particularly post February, have dropped by over eight per cent. Express Hotelier & Caterer takes a look at how hotels in Mumbai’s five-star segment have fared from January to April 2005...

The year 2004 proved to be a promising one for most hotels in Mumbai’s five-star segment. Business was consistent with an average occupancy of 82.49 per cent, an average room rate (ARR) of Rs 5,652 and revenue per available room (RevPAR) pegged at Rs 4,662. This vibrancy in the hotel business was attributed to the country’s buoyant tourism market, which witnessed an increase in foreign tourists arrivals, a rise in corporate business travel and considerable growth in domestic tourism.

This trend, as most industry experts had predicted then, was to continue in 2005 as well. But a peek into the occupancies and RevPARs of most hotels in the five-star segment of India’s commercial capital indicates that business is declining to an extent of over eight per cent. While, hotels initially did cross last year’s performance in the first two months (January and February 2005) with an average occupancy of around 83 per cent, the following months (March and April) shows a drop in occupancy levels to below 75 per cent.

Express Hotelier & Caterer brings to you an exclusive occupancy report of the five-Star hotels in Mumbai giving an insight into the ARRs, RevPARs and revenue generated by each hotel from January to March 2005.

Starts With A Bang
In the month of January, the five-star hotels in the commercial capital had an average occupancy of 82.45 per cent. Hotels in North Mumbai had an average occupancy of 84.71 per cent, ARRs of Rs 5,427 and RevPARs of Rs 4,597, while the five-star hotels in South Mumbai witnessed an average occupancy of 77.54 per cent, ARRs of Rs 6,632 and RevPARs of Rs 5,143.

Of the total market share of room nights sold in Mumbai, the five-star hotels in North Mumbai have garnered 70.40 per cent while South Mumbai accounted for only 29.60 per cent. However if one considers the RevPAR as a criteria for performance evaluation, the South Mumbai hotels have performed better than their counter parts in the North, even though the market share is negligible.

Leading the top performers in occupancy is the JW Marriott Hotel with an average occupancy of 91.54 per cent; followed by The Orchid with 89.93 per cent, Marriott Lakeside Chalet with 89.58 per cent and Taj President with 88.01 per cent. The last position in list of performers is held by the Grand Hyatt Residences (serviced apartments) with an average occupancy of 63.31, followed by The Oberoi with 71.43 per cent and The Leela with 73.44 per cent.

In RevPAR performance, IHCL’s Taj Wellington Mews (serviced apartments) achieved a RevPAR of Rs 7,915 while the Taj Mahal Hotel witnessed a RevPAR of Rs 7,133 followed by JW Marriott with Rs 6,808 and the Oberoi Rs 6,563. On the lower side, again, is the Grand Hyatt Residences with Rs 2,991, followed by InterContinental The Grand with Rs 3,421 and Taj President with Rs 3,912.

On the room revenues front, leading the pack was the Taj Mahal which closed at Rs 120,725,555 followed by the Hilton Towers with Rs 76,828,825 and JW Marriott with Rs 75,557,789. Reeling at the bottom in room revenues were Grand Hyatt Residences with Rs 13,629,543 followed by Holiday Inn with Rs 21,048,997, Marriott Lakeside Chalet with Rs 23,058,037 and Taj President with Rs 36,264,483.

The Downslide Begins
Not able to sustain the upward trend, business in the five-star segment - particularly room revenues - started to slide down while occupancy increased to 82.55 per cent.

Leading the performers in occupancy is the JW Marriott with 95.43 per cent, a rise of 3.89 per cent from the previous month. Hyatt Regency Mumbai, which achieved an average occupancy of 86.45 per cent in January, occupied the second position reaching a new high of 91.70 per cent in February. Marriott Lakeside Chalet touched occupancy of 90.13 per cent.

On the downside of performance, The Oberoi had a stupendous fall of almost 10 per cent. The hotel’s occupancy came down to 64.86 per cent from the 74.35 per cent it garnered in January. Grand Hyatt Residences continued in its spell of poor performance with 69.85 per cent occupancy which was better than its earlier month’s performance of 63.24 per cent. In the third slot was InterContinental The Grand with 71.58 per cent - a drop of 7.32 per cent.

The other hotels that saw an increase in occupancies where Taj Lands End, the Leela Kempinski and Renaissance while a marginal slump was witnessed in the performance of the ITC Grand Maratha, Grand Hyatt Mumbai, the Taj Mahal Hotel, Hilton Towers and Taj President.

In RevPAR performance, Taj Wellington Mews continued to be the forerunner with Rs 7,685. The figure, however, was less than the first month’s performance of Rs 7,915. Similarly, the Taj Mahal hotel occupied the second spot with Rs 7,005 like in the month of January, but its RevPAR slipped down from Rs 7,133. And retaining its third position is JW Marriott Rs 6,727 which coincidentally also slipped from its previous month’s figure of Rs 6,808.

The non-performers (in terms of RevPAR) for February comprised InterContinental The Grand with Rs 3,298 (a decrease from the previous month’s performance of Rs 3,540). Grand Hyatt Residences closed at Rs 3,592 (an increase from the previous month’s performance) and Taj President with Rs 3,806 (a minor drop from its January figure of Rs 3,912).

The other hotels that witnessed an increase in RevPAR were Hyatt Regency Mumbai, Taj Lands End, Grand Hyatt Mumbai, Marriott Lakeside Chalet, Renaissance and Hilton Towers. While drop in RevPAR were experienced by the Leela Kempinski and the Oberoi.

On the room revenues front, the Taj Mahal Hotel closed at Rs 107,087,930, Hilton Towers at Rs 71,014,458 and JW Marriott at Rs 67,431,587. However, the top performers for February saw a dip in revenue generation as compared the previous month. In fact, the total revenue accrued from all five-star hotels for the month of February was only Rs 725,833,778 while in January the figure was Rs 812,721,379, a drop of Rs 86,887,601 amounting to 10.7 per cent. Not one hotel super seeded its performance over the month of January as far a revenue generation is concerned.



The Decline Continues
If February witnessed a drop in revenues but an increase in the occupancy levels, March was a complete disaster. The average occupancy level in the city of Mumbai dropped to 74.5 per cent a slide of approximately eight per cent.

Again, leading the performers (in terms of occupancy) is the JW Marriott Hotel with 91.69 per cent. In the second place is the Leela Kempinski at 84.32 per cent and Hilton Towers at 82.80 per cent. However, the average occupancy of the top three performers did witness a decline in comparison to earlier months. InterContinental The Grand was the biggest non-performer as the hotel’s occupancy dropped drastically to 49.04 per cent from 71.58 per cent, a drop of approximately 22.54 per cent. Close on its heels was Hyatt Regency Mumbai, that introduced its single tariff rupee policy, with a drop of 20.92 per cent from 91.70 to 70.98 per cent. Even the Taj Lands End experienced a decline in occupancy from 85.78 per cent in February to 71.90 per cent in March, a drop of 13.88 per cent.

The other hotels that witnessed a decline in occupancies were The Oberoi, ITC Grand Maratha, Orchid, Holiday Inn, Renaissance, Marriott Lakeside Chalet, Grand Hyatt Mumbai, Grand Hyatt Residences, Taj Wellington Mews, Taj Mahal Hotel, Hilton Towers and the Taj President.

In the RevPAR performance category, Taj Wellington Mews continued to lead the segment with a RevPAR of Rs 7,841 - an increase from the previous month of Rs 7,685. The second spot was retained by the Taj Mahal Hotel with a RevPAR of Rs 6,518 and JW Marriott hotel with Rs 6,306 stood third. But RevPAR of both the hotels were lower as compared to the previous month.

InterContinental The Grand continued with its slump to Rs 2,217 achieving a RevPAR even lower than its last month’s performance of Rs 3,298, Grand Hyatt Residences was at Rs 3,113 from Rs 3,592 in February, Grand Hyatt Mumbai Rs 3,269 and Taj President with Rs 3,472.

The other hotels that witnessed a decrease in RevPAR were ITC Grand Maratha, Hyatt Regency Mumbai, Taj Lands End, Marriott Lakeside Chalet, Renaissance, Taj President, The Oberoi and Hilton Towers. While the only hotel that witnessed an increase in RevPAR was the Leela Kempinski.

In room revenues the Taj Mahal Hotel generated Rs 110,319,475, followed by the Hilton Towers with Rs 72,127,809 and the JW Marriott hotel with Rs 69,982,807. The total revenue accrued from all five-star hotels for the month of March was only Rs 689,501,054 while in February the figure was Rs 725,833,778, a drop of Rs 36,332,724 amounting to a reduction of approximately five per cent in comparison to February.

February Hotel Occupancy Report
Hotel	Rooms Available MTD	Rooms Sold MTD	Occupancy MTD	ARRs MTD	Room Revenue MTD	RevPAR MTD
J W Marriott	10,024	9,566	95.43%	7,049	67,431,587	6,727
ITC Grand Maratha	10,808	9,215	85.26%	5,948	54,809,114	5,071
Hyatt Regency	11,116	10,193	91.70%	5,395	54,989,073	4,947
The Leela	10,532	9,337	88.65%	5,455	50,936,967	4,836
Taj Lands End	10,304	8,839	85.78%	5,611	49,593,122	4,813
Renaissance Marriott	8,008	7,077	88.37%	5,236	37,054,784	4,627
Lakeside Chalet	4,956	4,467	90.13%	4,842	21,629,998	4,364
Grand Hyatt Mumbai	15,316	11,172	72.94%	5,478	61,195,973	3,996
Grand Hyatt Residences	4,116	2,875	69.85%	5,142	14,783,366	3,592
ICON The Grand	10,360	7,416	71.58%	4,608	34,169,896	3,298
Taj Wellington Mews	2,240	1,672	74.64%	10,295	17,213,689	7,685
Taj Mahal Hotel	15,288	12,859	84.11%	8,328	107,087,930	7,005
The Oberoi	9,324	6,048	64.86%	8,608	52,061,944	5,584
Hilton Towers	15,316	13,333	87.05%	5,326	71,014,458	4,637
Taj President	8,372	7,027	83.93%	4,534	31,861,879	3,806

February Hotel Occupancy Report
Hotel	Rooms Available MTD	Rooms Sold MTD	Occupancy MTD	ARRs MTD	Room Revenue MTD	RevPAR MTD
J W Marriott	11,098	10,176	91.69%	6,877	69,982,807	6,306
The Leela	8,776	7,400	84.32%	5,521	40,856,538	4,655
ITC Grand Maratha	11,966	9,485	79.27%	5,558	52,717,318	4,406
Hyatt Regency Mumbai	12,307	9,878	80.26%	5,039	49,774,283	4,044
Marriott Lakeside Chalet	5,487	4,503	82.07%	4,831	21,753,049	3,964
Renaissance	8,866	7,105	80.14%	4,679	33,247,730	3,750
Taj Lands End	11,408	8,202	71.90%	5,291	43,400,138	3,804
Grand Hyatt Mumbai	16,957	11,576	68.27%	4,789	55,432,994	3,269
Grand Hyatt Residences	4,557	2,734	60.00%	5,188	14,184,038	3,113
ICON The Grand	11,470	5,625	49.04%	4,521	25,430,444	2,217
Taj Wellington Mews	2,480	1,874	75.76%	10,377	19,445,658	7,841
Taj Mahal Hotel	16,926	13,509	79.81%	8,166	110,319,475	6,518
The Oberoi	10,323	5,432	52.62%	8,955	48,642,735	4,712
Hilton Towers	16,957	14,041	82.80%	5,137	72,127,809	4,254
Taj President	9,269	6,895	74.39%	4,668	32,186,038	3,472