The temperature in Chennai may not be very welcoming, but hotel room rates certainly seem to be.
According to the Hotels.com Hotel Price Index released earlier this week, the average price of a room in Chennai dipped 2 per cent in 2014, compared to 2013, from Rs. 5,897 to Rs. 5,754. This, hoteliers in the city say, is primarily because of an oversupply of rooms and a decrease in business travel.
“The main problem is, nothing is happening in Chennai at the moment. There are no new launches, conferences or openings, which has led to a fall in the number of business travellers here. While domestic tourism is healthy and the holiday destinations in the State are doing well, there needs to be more of a demand from the MICE (meetings, incentives, conferences, exhibitions) and business segment. Hotels are seeing their margins disappear,” said T. Natarajan, secretary, South India Hotels and Restaurants Association.
With about 7,500 rooms in the four, five-star and luxury hotels category alone, occupancy rate is only around 50 per cent, said Mr. Natarajan.
About three years ago, the city was touted as one of the leading destinations for MICE traffic, with a number of luxury hotels setting up shop– ITC Grand Chola, The Leela Palace, Hyatt Regency and several others all came up within some months of each other. However now, there seem to be more rooms than customers.
“The oversupply of rooms is across various price points – it’s not just the five and four-star hotels, but in three and two-star ones as well,” said Sudanshu Singh, director, rooms, The Park. “Average rates have dipped because of a decrease in corporate travel and that is primarily because of the nature of the economy – companies are restricting travel unless absolutely necessary,” he said.
Since the bulk of a hotel’s sales depend on its rooms, this has been a problem of late, he said. “However, the situation is already stabilising,” he added.
A dip in foreign incoming travellers too, has contributed to hotel prices falling, said M.K. Ajit Kumar, CEO, Asia Pacific Tours. “Perceptions about the changed scenario here affect travel, and this has led to a decrease in foreign tourists in addition to the fall in number of corporate travellers,” he said.
Post August however, the situation is expected to get better. “There will be more leisure travellers after mid-August, and the Global Investors Meet, scheduled to be held in the city in September too, will help,” he said.
Want to travel to Chennai? Now may be the best time – price-wise.
Average price per room per night 2014 compared with 2013 across India in INR
Source: Hotels.com Hotel Price Index
City | 2014 | 2013 | % change |
Mumbai | 7,889 | 8,013 | -2% |
Delhi | 6,899 | 6,707 | 3% |
Kolkata | 6,472 | 6,418 | 1% |
Bengaluru | 6,316 | 6,215 | 2% |
Goa | 6,342 | 5,930 | 7% |
Chennai | 5,754 | 5,897 | -2% |
Hyderabad | 5,582 | 5,509 | 1% |
Kochi | 5,674 | 5,290 | 7% |
Pune | 5,162 | 5,243 | -2% |
Jaipur | 5,291 | 4,983 | 6% |
