Second hike in two months pushes input costs, menus may rise 10%
Hotels in Bengaluru are preparing for another round of price hikes after a sharp increase in commercial LPG cylinder rates, intensifying cost pressures across the hospitality sector.
LPG costs spike
The latest hike of ₹202 per commercial cylinder—marking the second increase in under two months—has pushed prices to ₹2,161–₹2,183, up from ₹1,981. The earlier ₹150 bulk discount has also not been reinstated, further straining operators.
Menu prices set to rise
Hoteliers say the cumulative impact will likely lead to at least a 10% increase in menu prices, as businesses struggle to absorb rising input costs.
Input inflation widens
Beyond LPG, key inputs have surged significantly. Edible oil and charcoal prices have risen by nearly 30%, while packaging material costs are up around 25%. Even bottled water prices have increased, squeezing already thin margins.
Supply constraints
S.P. Krishnaraj of Nisarga Grand highlighted supply-side challenges, noting that LPG availability remains inconsistent, with black market prices reportedly far exceeding official rates.
Roopa Shastri, a hotel operator in Gandhinagar, said sustaining operations without price hikes is no longer viable, pointing to rising costs of essentials such as packaging and water.
Demand yet to stabilise
Hoteliers added that while costs are rising, business volumes have not fully recovered, limiting their ability to offset expenses. Many establishments continue to operate with reduced menus, even as the cost of basic ingredients such as vegetables and milk climbs.
Industry outlook
With cost pressures mounting across fuel, raw materials, and operations, the sector faces a challenging near-term outlook, with price revisions emerging as the only viable lever to maintain profitability.
