Hamstrung
Why hotel chains are unable to increase room rates in spite of robust demand.
That black money is nemesis of the economy is well known, but how it hurts businesses is nowhere more evident than in the hospitality sector. Despite buoyancy rising occupancy, demand average room rates (ARRs) have been stagnant since 2012/13. In fact, ARRs in some categories four star and three star have fallen. Sector veterans blame widespread use of black money, among other factors, for this.
Patu Keswani, Chairman and Managing Director of homegrown Lemon Tree Hotels, says if 60 per cent hotel owners in the country have invested black money in their businesses, it is obvious that rational pricing of rooms will go for a toss. "When hotel owners convert a negative return asset (cash) into a
