The hotel rates common to India’s big cities can easily feel like extortion. Take the hotels in the bustling city of Bangalore that raised rates during a big conference in February. Luxury hotel rates reached $800 per night, excluding tax, while even rooms at low-grade hotels swelled to $250. Visitors bitterly considered themselves lucky to find any rooms at all.
The problem posed by the paucity of quality hotel rooms and their inflated prices has even spurred India’s finance minister to take action. In his budget unveiled in February, P. Chidambaram highlighted a shortfall of 20,000 hotel rooms for the 2010 Commonwealth Games in New Delhi. He proposed a five-year tax holiday for new hotels in the area.
