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Tuesday, Apr 08, 2003

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Fewer check-ins worry TN hotel industry

Nina Varghese

CHENNAI, April 7

SLIDING occupancies and rates have pushed quality hotels in Tamil Nadu under pressure, according to Mr Uttam Dave, Chief Executive Officer, Pannell Kerr Forster Consultants.

The hospitality sector in Tamil Nadu has been hit by a minimal growth in demand for rooms and the existing demand, (number of customers) is unable to take up the new supply. As a spin off, the tariffs have been under pressure, which triggered a rate war among the hotels.

Mr Dave said that a number of significant projects have been abandoned or put on hold. Outside Chennai the scenario is as bad with many hotels under extreme pressure. (Destinations like Udhagamandalam have had bad seasons almost four years in a row.) There are also many hotels up for sale, Mr Dave said.

Chennai as a leisure destination has not taken off. Mr Dave said the proportion of international leisure visitors is down significantly and tourist destinations such as Thanjavur, Rameshwaram and Madurai show falling popularity with international visitors.

In 1981-82, 44.83 per cent of the visitors to Chennai came for pleasure, while 18.35 per cent came to the city on business. The trend continued through to 1988-89 when 55.48 per cent of the visitors to Chennai were here for pleasure and 21.87 per cent on business. However, 1996-97 saw a change in the dynamics with pleasure travellers at 31.8 per cent and business travellers at 39.7 per cent.

At the same time, Chennai's market share of international arrivals has gone up mainly because of the international airport. Most of the arrivals into Chennai have been business travellers.

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