Oct. 25 (Bloomberg) -- Hotels in New Delhi and its suburbs are filling up their rooms this week at the highest rates in four years as tourists flock to the capital city for India’s first Formula One race and a Lady Gaga performance.
Radisson Blu MBD Hotel Noida, about 25 minutes from the F1 track, said rooms are sold out ahead of the race this weekend, while Le Meridien in New Delhi boosted its prices by 45 percent, benefiting from what Knight Frank (India) Pvt said is the most important international event in the capital city.
“The event should give a boost to the economy as this will become an annual event,” said Sudeep Jain, New Delhi-based executive vice president at Jones Lang LaSalle Hotels, a unit of Jones Lang LaSalle Inc.
F1 is boosting demand after room rates across the nation cooled from the 2007 peak following the global economic crisis sparked by Lehman Brothers Holdings Inc.’s bankruptcy, Jain said. The race may also give a fillip to an economy that’s slowing because of high inflation and the fastest round of interest rate increases since the central bank was established in 1935.
The Indian Grand Prix in the satellite town of Greater Noida, where farmland is being swallowed up by gated communities for a surging middle class, will join cities including Monte Carlo, Singapore and Shanghai that drew more visitors and boosted hotel room rates with F1 races. The inaugural race will be held on Oct. 30 at the Buddh International Circuit, about 35 kilometers from New Delhi.
Hotel rates in Noida and greater Noida, where the F1 track is located, are at a record, according to Gulam Zia, Mumbai- based national director of research and advisory services at the Indian unit of Knight Frank LLP.
“This kind of hotel demand in the National Capital Region was unheard of,” said Zia. “This area hasn’t traditionally been a hospitality market, but now F1 has put Delhi and its surrounding areas on the map.”
Room rates in Delhi, which were unchanged in the past year, are at their highest since the 2008 global economic crisis because of the race, said Sushil Gupta, vice president of the Federation of Hotel and Restaurants Associations of India.
The two Delhi properties operated by Indian Hotels Ltd., which runs the Taj group of hotels, are sold out, while the Oberoi, owned by EIH Ltd., is selling rooms in the city for 41,500 rupees ($833) a night, according to their websites.
Doubling Room Rates
Rates at the Radisson more than doubled to 19,000 rupees this week from 8,500 rupees earlier this month, according to Sonica Malhotra Kandhari, a director at the MBD Group that runs the property. At the Le Meridien rooms are priced at 17,250 rupees a night, said Meena Bhatia, vice president of marketing and operations.
“There is a huge buzz around the event, there is great pride to have this event in the city,” Bhatia said.
Not every major international event in the city was a success. The run-up to the 12-day Commonwealth Games a year ago was marred by allegations of mismanagement, a dengue fever outbreak, flooding, the shooting of two Taiwanese, and the collapse of a footbridge leading to the main stadium.
It may also be too early to predict longer-term benefits for hotels as the event runs only for a week, Jones Lang LaSalle’s Jain said.
Lady Gaga Tickets
The F1 race will be followed by a performance by Lady Gaga in her Indian singing debut at the closing ceremony.
Glow Greater Noida by Zinc, part of a hotel chain that operates in Asia and the Middle East, was opened on Oct. 15 and will host the HRT team, said General Manager Biresh Sharma.
Doubletree by Hilton in the Mayur Vihar area in New Delhi, about 45 minutes from the race track, priced rooms 20 percent higher from the previous week, while the newly opened Hilton in the same area charged 38 percent more, according to rates published on its website.
Fans say the higher rates are part of the buzz that comes with the event. Raghuvir Konanki, 23, a consultant at travel technology software developer Sabre Holdings Corp. will be traveling to Delhi from Bangalore to support his favorite driver, Michael Schumacher. “I am really excited, because I just want Schumacher’s autograph, and that should do the trick for me, really!”
--Editors: Andreea Papuc, Linus Chua
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