Mangaluru hotels, caterers weigh 5% to 10% price increases

Marcus Bennett

Hotels, restaurants and caterers in Mangaluru are considering food-price increases of 5% to 10% as an Rs 8-per-litre milk increase and higher grocery and fuel costs squeeze operating margins.

Dakshina Kannada Hotels and Restaurants Association (DKHRA) secretary Devi Prasad said: “There would not be a common price increase across all hotels.” He said overall food prices could rise 5% to 10%, though each establishment would decide according to operating expenses and existing menu prices.

The latest Nandini milk price revision took effect on November 1. Hotel owners say it will raise preparation costs for tea, coffee, and dishes made with milk or curd.

Which input costs have changed?

The disclosed figures show pressure across pantry staples, while a possible fuel increase remains a risk rather than a finalized cost for Mangaluru kitchens.

• Toor dal and urad dal rose from Rs 120-130 per kg to about Rs 150.
• Onion moved from about Rs 20 per kg to Rs 50-53 and has stayed near that level for nearly three months.
• Rice rose from Rs 50-52 per kg to about Rs 85. Some varieties could reach Rs 100.
• LPG cylinder prices could rise by another Rs 200-300, raising kitchen expense if the increase occurs.

What are hotel operators considering?

Dakshina Kannada Hotels and Restaurants Association president Kudpi Jagadish Shenoy said the group will discuss the November milk revision at its next meeting. He said hotels may consider menu increases of about 10%, depending on expenses.

The association also considered repricing during the previous milk increase but chose not to implement a change then. Continued increases in grocery prices have made absorption harder.

Which menus have the least pricing room?

Tea and coffee already sell for Rs 20-25 at some hotels and Rs 35-40 at others, leaving hotels at the lower end with little capacity to absorb another milk increase or raise those menu prices significantly.

The gap does not show that one set of hotels earns more; it shows only that starting prices differ. Neither DKHRA nor the operators disclosed check averages, food-cost ratios, labor shares or profit margins. That omission leaves pricing decisions without a common margin benchmark.

What changed after the festive season?

Hotel owners avoided menu increases during October because of the festive season.

Prasad warned that rising operating costs could push some establishments into losses, a risk made more acute because the same revenue base now supports weaker sales and fewer tourists. The warning lacks a quantified margin threshold, so it does not show how many hotels are close to a loss.

How are caterers responding?

The catering sector faces similar pressure because event and function menus use substantial quantities of milk, curd and rice, while fuel and LPG costs add another layer of uncertainty.

A Ashwatham Hegde, proprietor of Tulunadu Food Catering Services, is an executive member of the Dakshina Kannada Catering Owners Association.

“Milk and curd are major items for us. Given the quantity we use, the increase will significantly affect the catering industry. Prices will definitely have to be increased, even if only slightly. A 5-10% increase is certain,” Hegde said.

Hegde said caterers must recalculate total costs before setting new rates. Rice prices change almost daily, which makes forward pricing difficult. Any further fuel or LPG increase would leave caterers with little choice but to pass at least part of the increased costs to customers.

His certainty describes an industry response, not a guaranteed price at every company. Caterers make individual calculations, and no association-wide rate schedule has been announced.

The next DKHRA meeting will show whether operators move from discussion to selective increases. Without a common price schedule, price changes will remain uneven across hotel menus and event catering rates.