Airline crew biz shrinks 35% for hotels

Mumbai: Airlines' woes have translated into bad times for the hospitality sector as well. The hotel industry has seen a decline in business from its most secured customer segment -- airlines personnel.
Hoteliers across New Delhi and Mumbai said most airlines have rationalised flights to minimise hotel stay by crew. Clubbing of seat capacity has further reduced the number of airline crew travelling on half-filled flights and staying out of home base to return another day.
On the condition of anonymity, a senior official at a leading Indian hospitality chain in north Mumbai said, "Business has fallen by 20% in terms of the number of airline crew staying with the hotel. The average room realisation for this segment has also declined by 40-45%. Combining both the aspects, I estimate the overall shrinkage to be around 35%."
Hotels across key markets generally set aside 10-25% of room inventory for airline personnel. The rooms bring them regular business throughout the year even though the rates are highly discounted. Now with airlines cutting costs, this business has declined substantially for hotels.
Anil Paranjpe, vice president (operations), Orchid -- An Ecotel Hotel, said, "Though discounted, Mumbai hotels charged airline crew rates of Rs 8,500-9,000 till about last year. This was when average room rates were as high as Rs 12,000-14,000. But now with slowdown hitting the industry, the crew rates are believed to be well under Rs 5,000."
The situation in New Delhi isn't any different. While the room allocation for airline crew is more or less the same, the impact on rates has been slightly lower. Rasika Singh, director (marketing) at Shangri-la Hotel in New Delhi, said the hotel has been fortunate as none of the 3 airlines it caters to has reduced frequency or cancelled operations.
16/05/09 Ashish K Tiwari/Daily News & Analysis

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Categories: Indian Aviation- In General May 2009