Name some of the international brands in the hospitality sector and Coimbatore already has them or will have them soon. The last few years have seen quite a few star and business hotels opening facilities in the city. With more projects in the pipeline, Coimbatore is turning out to be a market that is both challenging and promising.
For the hotels here, the growth potential comes from several factors – the district’s industrial strengths in sectors such as textiles and foundries, presence of large number of educational institutions and hospitals, location advantage as the gateway to Ooty - a well-known tourist destination, and proximity to export hubs such as Tirupur and Karur. These bring visitors to Coimbatore not only from other countries but also from different parts of the country.
However, with a capacity of nearly 5,000 rooms and expectations that this would go up to 8,000 by 2018, hotels are already feeling the impact on rates. Almost 60 new projects were earlier proposed here. However, just about 20 per cent of them started taking shape, says a leading property consultant here.
Managers in a couple of well-known hotels here told The Hindu on Tuesday that the average occupancy rate now is 55 per cent. Usually, this is a dull period as it is the last quarter of the financial year. However, Coimbatore is more a MICE market (meetings, incentives, conferencing and exhibitions). When there is a major conference or exhibition, at least a few hotels see a jump in occupancy.
Coimbatore is a challenging market as it is price-sensitive, says one of them. Existing hotels need to invest for maintenance, refurbishing and maintaining their brand standards and the main business is from room occupancy. And, many of the overseas business visitors book rooms through their local partners. These partners look at more benefits at a relatively lower price. When more number of rooms is added, there will be a pressure on prices, they say.
Industries in Coimbatore are located even 20 km away. However, offices are located mostly in two or three areas in the city.
Hence, the location of the hotel property is an important factor to attract more visitors. Hotels should jointly look at promoting the development of facilities such as sports complex and attracting more events to the city that will bring in more visitors. Focus should be on improving flight connectivity and jointly representing to the Governments to bring down the taxes.
There is still scope for business here as it has a huge base of industries that are export- oriented: garments, valves, etc. Business has been better in the last six months compared to last year and with more efforts, it can be improved for the entire chain of the hospitality sectors – logistics providers, flight operators, hotels, etc., they say.
