Hotel majors turn towards South

The surge in the number of outbound and inbound travellers in South India has kindled tremendous investment prospects.

Major hotel chains, which had completed expansion in North India, are now focusing on the South by reinforcing presence in select cities. And it is not just tourism.

The booming industrial growth in Hyderabad, Bangalore and Chennai, among others, has lead to a spurt in business travellers, said Mr T. Damu, former member of the National Tourism Advisory Council of the Government of India, said.

As South India transformed itself into an IT hotspot for India and became an automobile production point for several international brands, the demand from business travellers burgeoned.

Despite the huge build up in hotel rooms and other infrastructure, the demand from major cities like Chennai, Bangalore, Hyderabad and Kochi are often found wanting during peak business seasons. And the demand is emanating from the whole spectrum of users: right from the top notch five star room users to the lower-end cheap lodges.

And now the growth is focusing on satellite cities where the IT bigwigs and automobile majors have set up shop. In many instances, it is virgin territory. There is a huge demand but hardly any suppliers of the required facilities. Investment possibilities remain huge.

As land prices have skyrocketed in major Tier-I cities and a ready-made demand exists in the bustling satellite cities, the hoteliers are homing in on the cheaper land on offer from the fast industrialising outlying cities.

But the inbound visitors are not restricted to business travellers alone. There is a huge and growing demand for tourist facilities.

While Kerala has taken a lead in facilitating tourism, the rest of the Southern states are not left far behind. Kerala pioneers like the CGH Group are taking the lead in extending their reach to neighbouring states like Tamil Nadu and Karnataka.

The have extended their footprint to Tamil Nadu by developing new standalone properties in Chettinad and have acquired land in Rameshwaram for their next project.

In Pondicherry they have acquired a vintage property and converted it into a marquee hotel. In Karnataka they have built a property facing the Gokarnam beach, which is unique for the yoga and mediation session that it provides.

As if on cue, major players have been making a beeline for Kerala and investing on the State's unique tourism brand. Hotel majors Taj Group, Le Meridien, the Leela and the Oberoi Group have built or acquired properties here. Construction of several other hotel majors are on and is expected to be completed soon. Others — like Ramada and Zuri — have gone to the hinterland to build resorts in places such as Kochi and Kumarakom.

The tourism players have been extending their reach from the bustling cities to places of cultural, architectural and historic importance – in effect being the catalyst for change to out flung regions in rural India.

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