The hotel industry in Dakshina Kannada and Udupi districts is facing severe challenges due to the rising costs of essential commodities, including milk, dairy products, cooking oil, tur dal, and basmati rice. Hoteliers are struggling to sustain their businesses as operational expenses surge while sales remain low.
Key Challenges Faced by Hoteliers
Increased Raw Material Costs: A 5-10% hike in cooking oil and soaring prices of essential groceries have significantly impacted food costs.
Rising Rent Expenses: Over 65% of the 8,000 hotels in the region operate in rented spaces, and rental costs have doubled in recent years.
Labor Shortages and Wage Hikes: A shortage of skilled workers has forced hotel owners to offer higher wages to retain employees.
Catering Industry Impact: Wedding and event caterers are also affected, considering moderate price increases to balance costs without overburdening customers.
Unavoidable Price Hike
Hoteliers stress that a price revision is necessary to keep their businesses afloat.
“If prices are not revised, running hotels will become impossible. We will soon hold a meeting to finalize the price hike,” said Kudpi Jagadish Shenoy, President of the Dakshina Kannada District Hotel Owners’ Association.
The Karnataka State Hotel Association is also deliberating on the issue, with Shivaprasad Shetty Tallur, an Executive Committee Member, confirming that a price increase is under discussion to cope with soaring costs.
As the hospitality sector grapples with inflation and operational challenges, an industry-wide price adjustment seems inevitable to ensure the survival of hotels and restaurants in the region.
