Your New Year luxury holiday just got a lot costlier

From Rajasthan’s royal palaces to beachside retreats in Kerala, India’s top resorts are seeing unprecedented demand for Christmas and New Year. Rooms are vanishing fast, even though the New Year is still two and a half months away. For those still available, expect to pay a steep premium—some as high as ₹1.5 lakh a night.

At the Oberoi Amarvilas in Agra, it costs ₹1.75 lakh to book a stay for Christmas eve, up 40% ₹1.25 lakh at the beginning of the year. For the days until New Year, the rates vary from ₹1-2 lakh.

Meanwhile, at Oberoi's Vanyavilas resort in Ranthambore, it costs ₹1-1.5 lakh a night at the turn of the year. It is already sold out between December 23-25, and for the days that it is available, the rates are above ₹1.5 lakh, both before and after Christmas.

The situation is no different at Umaid Bhawan Palace in Jodhpur operated by Taj Hotels, where rooms cost ₹1.15 lakh a night on 24 and 25 December, ₹3.15 lakh on 26 December.

While two nights at Kovalam's The Leela Raviz set you back by more than ₹60,000 in January this year, during Christmas, the same rooms are being sold for ₹1.2 lakh for two nights. Luxury tents at Raas Chhattisgarh will cost ₹40,500 at night on Christmas day. Radisson Blu in Alibaug is already sold out.

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"Leisure demand is looking very good for our hotels. It is trending 25% over last year. November is looking similarly high. Christmas and New Year for our upcoming property in Assam, which will launch by then, is already sold out. More than half our hotels -- 11 that will be operational by then -- are expected to be sold out," said Kapil Chopra, director at Untitled Hotels & Resorts Pvt. Ltd, the company that runs boutique luxury chain, The Postcard Hotel. Some of the portfolio hotels have been booked out since July, he added. Prices are up by 10 to 15% over the same period last year, depending on the location of their hotels.

S.D. Nandakumar, president and country head of holidays and corporate tours for SOTC Travel Ltd said domestic tourism has seen a significant revival post-pandemic; however, what is noteworthy is the interest in India’s premium luxury segment. "Room tariffs being upward of ₹1.5 - 5 lakh per night is clearly not proving to be a deterrent. And it is not merely branded global chains, but equally our uber-luxe India brands and properties that are seeing an uptick in demand - from the safari resorts of Aman Resorts-owned Aman-I-Khas at Sawai Ranthambore, Aman Bagh in Alwar, Rajasthan, Aramness in Gir, or to the Taj and Oberoi-run palaces. What is particularly encouraging is that this demand is not restricted to just metro consumers but is also being driven by markets like Nagpur, Chandigarh, Surat, and Madurai," Nandakumar said.

Hotels are setting higher rates early on to capitalize on peak demand, particularly as it follows the high of the auspicious wedding season, which takes a break mid-December and resumes in mid-January, giving just enough time for leisure travellers to check in.

Rattan Keswani, a hospitality industry veteran with leadership experience at Lemon Tree Hotels and The Oberoi Group, said, “Usually, hotels position themselves with higher rates early on for these types of occasions to create some early demand. This is also the time when hotels upsell for weddings, and this season promises to be a strong one. Hotels have been charging higher rates over the last two years, and consumers have shown the ability to pay."

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"Q3 is looking quite strong for us with an expected 30% growth in our revenue per available room (RevPAR). We are also seeing the foreign traveller return and that our average length of stay -- across different cities, including in goa has grown," Chopra of Postcard added. RevPAR (revenue per available room) is a metric which hoteliers utilize to gauge room yield based on occupancy rates.

According to data from hospitality consultancy Hotelivate, five-star deluxe hotels -- the category in which these luxury hotels and resorts feature -- have seen impressive growth, with their average room prices rising by 20.2% in the past year to about ₹15,655 per night, and 69.2% of their rooms being occupied. Over the last two years, these high-end hotels recorded a huge 147.4% increase in their revenue per room, making them the top performers in the hotel industry. This is mainly due to more people travelling for business and leisure within India, leading to higher room prices and increased bookings. In comparison, regular five-star hotels also did well, with a 19.8% rise in prices, reaching ₹8,756 per night, and a 131.0% growth in revenue over two years. The overall increase shows that luxury hotels are in high demand as more travellers seek premium stays.

However, Keswani expressed concerns about the sustainability of these rates in the long run.

“Some of these hotels are aiming for a stable $200-250 per night rate, or around ₹17,000-20,000, which sounds reasonable, as most of them deliver services at global standards equivalent to or deserving of $500 a night. However, the concern is that the sweet spot for travellers in India is only around ₹7,000-10,000 per room per night, which many people are comfortable spending. So, whether these hotels can sustain these higher rates in the long run is uncertain. Hotels are holding onto these rates because it has taken them a long time to reach this point. After that many industry experts recommend caution as high hotel and airline rates can drive the business away to international locations. These countries offer slightly lower hotel rates and airfares with negligible visa fees. The Commonwealth Independent States and South East Asian nations are reaping the benefit, and they may start getting a better share," he added.

City five stars, Goa hotels may come at cheaper rates

Luxury hotels in cities may come in as a respite for those who are okay with staycation packages instead of venturing out. A night at The Imperial in Delhi will leave you dearer by ₹31,000, excluding taxes. Similarly, a room at the Leela Palace in Delhi will start at ₹39,000, excluding taxes.

According to a recently released report by hospitality consultancy Hotelivate, titled 'Trends & Opportunities 2024', while the hotel sector continues to perform well, and halfway into FY25, overall growth is already ahead of India's hotel performance of one year ago, with the peak winter months still to come. However, growth has slowed in most markets and even declined in a few areas. Leisure hotels, having raised their rates recently, saw a dip in demand. For instance, demand in Goa has declined as of early 2024/25, prompting concerns about future trends," the report said.