The association stated that rising global fuel prices have led to severe cost pressures on the industry. Increased fuel costs are directly affecting multiple aspects of hotel operations, including transportation, power generation, supply chains, and overall service management, resulting in a significant rise in operating expenses.

A major challenge highlighted by the industry is the instability and rising prices of LPG supply, which is essential for hotel kitchens. Several hotels are reportedly facing delays in cylinder refills and supply shortages, affecting kitchen efficiency and food preparation. As a result, hotels are being forced to explore alternative fuel options, which are often more expensive and operationally challenging.

The association noted that rising costs of cooking oil, transportation, and other essential commodities have compelled hotels to increase menu prices by 20-30 per cent. Despite this, many establishments are absorbing part of the cost to maintain customer satisfaction and service standards. However, sustained cost escalation is putting significant pressure on profitability.

To cope with the situation, hotels have adopted various operational measures such as optimising kitchen processes, simplifying menus, and reducing energy consumption. These steps are helping manage costs while maintaining service quality.

The situation is also having an indirect impact on tourism. Higher aviation fuel prices have led to increased airfares, resulting in cautious spending among both corporate and leisure travelers. While occupancy levels remain stable for now, the association warned that prolonged conditions could affect demand.

On the employment front, the star hotel sector continues to retain its workforce. However, the association cautioned that prolonged financial stress could impact job stability in the long term.

Describing the current situation as manageable but financially stressful, the association stated that further escalation could affect operations and growth prospects. The most pressing concern remains LPG supply and pricing issues affecting the hospitality sector. The association has urged the government to ensure uninterrupted LPG supply to the hotel industry and take necessary measures to control input costs during this challenging period. Timely intervention, it said, will be crucial to sustain operations and protect jobs.

RV Swamy, president of AP Star Hotels Association, reaffirmed the industry's commitment to delivering high-quality hospitality services despite the ongoing challenges.