NEW DELHI, July 13: Political uncertainties and a sluggish market have hit the hospitality industry hard as hotels showed a steep fall in their occupancy rates. The ebbing flow of business visitors to India as a result of delayed projects and the usual dip in tourist arrival in summer are the major factors behind the trend, leading hoteliers say.

The current occupancy rates in hotels are down to even below 50 per cent, after a two-year boom when occupancy rates were as high as 80 per cent as business travellers flocked to India at the height of liberalisation.

The public sector India Tourism Development Corporation (ITDC) was particularly hardhit as its occupancy rate came down below 50 per cent for the first time in recent years, sources said. Luxury hotels in the capital enjoyed a near 75 per cent occupancy rate during the corresponding period of the previous two years, higher than the present figure, they said.

``The projects of various businesses are getting delayed because of the political climate. This has affected the inflow of business travellers,'' Asian Hotels managing director Sushil Gupta said.

``Since the elections, there has been a steady drop in room occupancy due to political uncertainity,'' consultant of ITC Hotels Rabindra Seth said. The number of foreign executives visiting India to explore business prospects, he said, have come down.

Le Meridien chairperson Harjit Kaur said it had suffered a drop of more than 20 per cent in occupancy rate this summer compared with last year.

Spokesperson of the New Delhi Hilton, Anjali Chatterjee also said the downtrend in the economy hit the hotel. ``The inflow of tourists during summer has also come down this year,'' Kaur said.

The occupancy rate in Meridien this summer was about 50 per cent.Hoteliers, however, were reluctant to divulge how bad they were hit. While some confessed a 20 per cent drop in room occupancy, others claimed they were not affected that bad.

``If you compare with last year's figures, there has certainly been a drop, but the drop in rate in the preferred hotels category has been very low,'' Seth said, citing that the last two years saw the occupancy rates getting an `unusual buoyancy'. Yet another reason for poor occupancy is the ever-increasing taxes, Kaur said.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.