Chennai has emerged a hotspot for hospitality projects as leading brands have established a presence in the market here over the last three years.

With commercial activity gaining momentum and subsequent influx of foreign nationals, hospitality players find Chennai a potential market for their expansion plans.

According to a report by Cushman and Wakefield, Chennai has a total hotel inventory of 7,517 rooms and an upcoming supply of 3,274 keys by 2017, of which 51 per cent is in the mid-scale segment, 29 per cent is in the budget segment, 11 per cent in the upper upscale segment and 9 per cent in the upscale segment. About 20 per cent of this total inventory went operational in 2014 alone.

Big names Between 2012 and 2016, around 13 hotels were launched in the city that includes international players like AccorHotels and InterContinental Group that runs Holiday Inn chain adding an inventory of about 2,800 rooms. Hotels which saw an occupancy rate of 55 per cent previously, witnessed higher occupancy rate in 2015 facilitated by turnaround in the economy and increasing tourist activity due toboom in healthcare sector.

Jean Michel Casse, Senior Vice-President, Operations — AccorHotels, India, a joint venture partner for Hotel Ibis, said the city and its surrounding areas saw significant foreign investments in manufacturing and servicing sectors over the last decade. Many of the leading auto manufacturers have set up their facilities in Chennai that has received significant contribution from IT and ITES industry and healthcare segment as well.

Unique destination “The ramping up of Chennai as an industrial and financial hub while still maintaining its preserved culture and heritage has made it a unique destination, compared to other metropolitan cities in India,” Casse said.

In addition, there is a shift in the retail landscape with leading international luxury and high-end lifestyle and auto brands making a foray into the market. This has helped in the growth of luxury hospitality segment and one of the reasons why Chennai’s performance is on par with its counterparts in other metros. “With the new and upgraded airport and addition of new air routes, the city will attract international and high-end luxury brands in the hospitality segment,” he added.

Wider choice With Chennai emerging a luxury destination, Saleem Yousuff, Area Director – Taj Chennai and General Manager – Taj Coromandel, said this is the best time for the hospitality market in Chennai as is evident from several hotels that are coming up, giving wider choice for the guests.“The hotels are also reinvesting into upgrading their facilities and engaging effectively with consumers with clearly differentiated offering,” Yousuff added.

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