Few Takers For Single Tariff Policy

Mahesh Tharani - Mumbai

The recent switchover to a single tariff policy by Hyatt International has not found too many followers in the industry. Hotel companies like ITC Hotels, Hotel Leelaventure Ltd, East India Hotels and Sarovar Park Plaza Hotels & Resorts are not following suit citing a number of reasons which include inconvenience to guests, changing the accounting structure, etc.

Hotel Leelaventure Ltd is categorical about continuing with its present dual tariff policy. Sanjoy Pasricha, corporate head - sales and marketing, Hotel Leelaventure Ltd says, "Quoting in rupee terms doesn't make sense. In fact, I think having the rupee override the dollar tariff is completely baseless as rupee tariff will then make it expensive for our Indian clients if you take into consideration the earning power of Indians vis a vis foreigners. Also dollar tariff makes comparing hotel performances easier."

Geeta Singh, vice-president, corporate communication, Oberoi Hotels and Resorts also said that the hotel company is not going for the rupee tariff. "We haven't even thought of it," said Singh.

Krishna Patel, public relations manager, Sarovar Park Plaza Hotels & Resorts, echoed the same sentiment. She said, "We would not be going in for the rupee tariff policy. Even when we review our contracts for the next year in August, we would still not consider it since it would be an inconvenience to change our policy."

ITC Hotels believes that a single tariff would make no difference. A source from the hotel group said, "We do not see any benefits. Most hotels finish their contract agreements by September so probably the topic could come up for discussion then. However, I am convinced that the ITC group will not change its stance."

The only dissenting note came from Le Meridien group which is considering to follow the Hyatt example. Rahul Bubber, regional director of sales, Le Meridien, said, "We are certainly mulling over the single tariff policy since there is a standardisation of accounting. The purchasing parity between a foreign and an Indian client is almost the same and we want to reflect that equality. Also it would be effective since the rupee is appreciating in value against the US dollar." The group, though, is still undecided and have not set a time frame for the implementation of the policy.

Currently, the only two groups on the single tariff bandwagon are Hyatt, which announced its intention recently to convert to the rupee regime, and Choice Hotels India which has been practising it for the past five years.

Explaining the rationale behind their policy, Sunil Mathur, chief operating officer, Choice Hotels India said, "The dollar exchange rate was quite high when we shifted to single tariff policy and it has been a good move as it offered our guests equality. But I cannot comment on the difference in the current market scenario as over 75 per cent of our guests are domestic tourists."

Hyatt defends its decision. Ratnesh Mohan Verma, area director - marketing and sales, Hyatt International said, "The reason behind this shift is basically to bring about transparency in accounting standards. The parity would build customer confidence in the brand as it would make everything simpler and much more convenient."

Franchise brands like Carlson Hospitality Marketing - India Pvt Ltd (CHM-IPL), owners of the Radisson, Regent and Country Inns & Suites brands, are leaving the decision of tariff policies to the individual owners of the properties. Rummy Anand, director, sales and marketing, CHM-IPL said, "It is the owner's prerogative. As of now most of them have a minimal difference in the dual tariff rates. We will be having a meeting next month with the owners and if they bring up the issue we would give them the guidelines for converting to a single tariff policy."

Homi Aibara, partner and consultant, Mahajan & Aibara (M&A) Management Consultancy Division, believes that contracted businesses would still proceed in the same way, whether single or dual tariff, and each hotel could change their policy to make accounting easier to administer. Aibara said, "In the end what needs to be seen is that free enterprise reigns."