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Chennai hoteliers hope for better occupancy rate from September

07:10 PM Jul 27, 2021 | IANS

Star hotels in Chennai continue to have empty rooms despite Covid-19 relaxations, industry officials said.

Hoteliers cite the dichotomy of the Tamil Nadu government allowing retail liquor shops to sell, while ordering them to close their bars, ban alcohol room service and at the same time continue to renew their liquor vending licence.

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Some green shoots are seen if the Covid-19 infection numbers decline and vaccinations increase, business will get better in the last quarter of 2021, they add.

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"If July goes without any Covid-19 related glitches -- increase in infection numbers and associated restrictions -- then business in September will be like 2020 September when business started picking up," Rahul Nama, General Manager, Mercure Chennai Sriperumbudur, told IANS.

The 100-room property Mercure, part of French group Accor, is located in the Sriperumbudur-Oragadam industrial area.

"We are seeing some green shoots with some industrial projects taking off," Nama added.

According to him, the average stay for the star hotels in this belt is about 2/3 nights and the occupancy is about 50-60 per cent.

Speaking of the room rates, he said they are in the Rs 3,000 band and some corporates want lower rates.

Nama said officials from the automotive, electronics industries are travelling.

"If things are stable then we expect business in September to touch the levels of what it was in Jan/Feb this year," Nama said.

Industry officials said city hotels have better business as they can tap into the leisure business -- short term stays for those working from home -- as well as events like weddings.

Though travel companies are saying that domestic travel is picking up, hoteliers are not agreeing with that view.

"Things are very slow and not very encouraging. There are still Covid-19 restrictions. People are not willing to travel long distances. Short visits by tourists are happening but not like before when they checked into hotels," Yangya Prakash Chandran, Founder and CEO, Crossway Hotels and Resorts, told IANS.

According to Chandran, though hill stations have been opened up for tourists, not many are willing to travel long distances and the roads are also damaged in places like Kodaikanal.

Crossway, which manages a chain of hotels and resorts has a new property in Kodaikanal, Revostay SKR.

"Ooty is still slow to pick up. And now it is raining there. We hope it starts picking up from next month onwards," Manav Goyal, Director, Adyar Gate Hotels Ltd, told IANS.

Adyar Gate Hotels owns the Crowne Plaza (5 star hotel in Chennai), InterContinental Chennai Mahabalipuram Resort (beach resort) and Fortune Sullivan Hotel, Ooty.

"For the hoteliers, the market situation due to Covid-19 is like a five day cricket test match where rain stopped the game at the end of the second day kicking in uncertainty about play resumption," Goyal said.

After the lockdown last year, business picked up after September and then the Covid-19 second wave came resulting in another lockdown.

Now there is talk about a third Covid-19 wave.

"The best plan is not to plan," Goyal remarked.

"Business travel is down and is at not even 10 per cent of the normal level," Chandran said.

Hoteliers say they are getting hit from all directions without any relief-- government taxes, power charges, licence renewals and meeting overheads.

"Today it is all about holding out. It is a great opportunity for value buys. All over India properties are up for sale. Big chains can survive the bloodbath," Goyal said.

According to him, corporate travel is next to zero and banqueting business (wedding and others) is also hit due to Covid-19 restrictions.

"Business might pick up this September. Overall this year will be dull. One cannot predict anything in this market," Chandran said.

The one segment that is doing well is the beach resorts along the East Coast Road with an average occupancy level of about 60-70 per cent, industry officials said.

"We reopened InterContinental Chennai Mahabalipuram Resort in June. The room business is good while the banqueting is slow," Goyal said.

Hoteliers are not agreeing to price their offering based on marginal costs -- taking into account only the variable costs -- till the pandemic situation eases.

They said the room rent has come down by about 40 per cent from the pre-Covid levels and it cannot go down further.

According to them, the average room rent in the city for star hotels ranges between Rs 2,000 and Rs 4,000.

Industry officials told IANS that attempts to target newer segments like the middle class with various offerings to experience the five star stay did not bring in any major results.

Vaccination coupled with herd immunity is what will give the industry a reprieve. But when that would happen is the big question, they said.

Hotels, malls gearing up in Chennai's Old Mahabalipuram Road as IT firms open premises

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