The Hindu Business Line : Hyderabad to add 4,000 hotel rooms by 2010

Hyderabad, Nov. 19 The hospitality sector in Hyderabad is in a state of transition – bracing up to add about a whopping 4,000 rooms in couple of years in the backdrop of concerns of general economic slowdown, increase in occupancy levels and lower revenue per available room (RPAR).

Additions of about 20 major properties including that of Park Hyatt, Trident, Marriott, Leela and Taj among others will effectively double the current capacity of 4,000 rooms across all types of hotels.

Occupancy levels rise

Interestingly, while the occupancy levels have gone up during the year for five-star and five-star deluxe hotels, there has been de-growth for other category of hotels and there is some sluggishness lately, according to Mr Veer Vijay Singh, President of Hotels Restaurants Association of Andhra Pradesh.

Mr Singh, who is also Director, Taj GVK Hotels, told Business Line that the sector is now faced with a situation where there is likelihood of sudden oversupply coming in. This means that unless the business goes up commensurately, some of the properties are in for tougher times. There could be consolidation too.

The General Manager of Novotel Hotel, Mr Pavithran Nambiar, said, “the sector has not faced the impact of slowdown as yet as we believe it is overblown in local context. Hyderabad continues to be a very attractive destination for businesses and makes sense for investments with more businesses turning to it.”

Given the current price structure and hotel tariffs compared to other cities in the country such as Mumbai and Bangalore, it continues to be very attractive destination not just for business but also for conventions, a not well marketed offering, Mr Nambiar said.

The General Manager of Marriott Hyderabad, Mr Ty Collins, said Marriott with its mixed set of customers both international and domestic continues to be optimistic about the potential of the sector and is in the process of adding another property next year in Hyderabad.

“While companies are under pressure to cut costs as their business partners we work closely and ensure that their business is not affected. We believe that the litmus test for hospitality is the airline industry. If airline industry grows, hospitality grows along,” Mr Collins explained.

“However, for travellers, Hyderabad and India continue to be costlier than some of the countries in the region. If a family has about $1200-2000 for a holiday, it is cheaper to holiday in a place like Thailand than in India, as hotels are cheaper” Mr Pavithran explained.

“For this to change, we need to promote travel more aggressively and also create additional infrastructure,” he argues.

Dependent on tech firms

Mr Singh said the sector is largely dependent on technology firms and this needs to change with a mix of other industries like is the case with Chennai. Though Hyderabad seems vulnerable to slowdown, so far we have not seen much impact.

Yet, Mr Singh cautions that the demand supply dynamics may change the business scenario in the next two-three years.

More Stories on : Hotels | Andhra Pradesh

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