Hoteliers say no to annual price hike to retain business

Hoteliers say no to annual price hike to retain business
Hoteliers say no to annual price hike to retain business

At a time when the price of all commodities and services are going up, hoteliers in Bengaluru have decided to offer some respite to their customers, as the Bruhat Bengaluru Hoteliers Association (BBHA) has decided to forgo their annual price hike, which takes place in April.

Even as the prices of essentials like vegetables, grains, and pulses have gone up in recent months, hoteliers have refrained from hiking prices to retain business. Last year, the price of various items increased by 5%-10% in most hotels in the city. However, this year, hoteliers said business was badly affected in summer, especially in April, due to the heat outside.

“We did not increase the prices this time as it would be bad for business. The business has already come down in the last few months because of various reasons, and now, if we raise the prices, we will lose more customers. Besides, Bengaluru is a city where you can get the same item for different prices. So, most restaurants have already fixed prices according to their expenditure,” said PC Rao, president, BBHA.

He also mentioned that with the price of one commodity falling by the time the other goes up, the hoteliers can manage with existing prices. “For now, some vegetables and coffee powder have become expensive. But at the same time, the price of vegetables that had previously skyrocketed, like tomatoes and onions, has come down.”

Profits to take a hit

The hotel owners, however, do not deny the fact that their profits will take a hit without the hike this year.

“The average expenditure has gone up by 15% – 20% when compared to last year. Vegetables like chilli and garlic have become very expensive and so has labor. As it is hot outside, the electricity bills in air-conditioned restaurants have gone up like anything as customers prefer AC running at all times. The overhead expenses have gone up, but business has come down,” said Deepak Shreyas, owner, Adithya Hotel, Mahalakshmipuram.

He added, “We have taken a dip in our profit margin, but we cannot increase the prices as we must consider the affordability of customers. Instead, we are ensuring to avoid waste of food, water and other resources. “We are also tightly monitoring our purchases.”

While the prices will not be raised anytime soon, they might come a little later in the year once the weather stabilizes. The hoteliers hope that once the monsoon sets in, many of their overhead expenses and the prices of vegetables will come down, and by then, they can objectively decide about the price hike. “We need to increase it from time to time to sustain the business,” Mr. Shreyas said.

While most hotels say they have not compromised with the quality or quantity of the food, some customers have reportedly noticed a decrease in quantity. “I have been a regular consumer of a hotel near for over two years now. They have not changed their prices in over a year, but the quantity of servings has reduced slightly,” said Nikhil. Yes, a resident of Peenya.

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