Seemandhra stir: Hospitality business in Visakhapatnam takes a beating

Occupancy rates, particularly in two, three-star hotels, have fallen drastically over last 3 weeks

The ongoing agitation in the Seemandhra region is taking a toll on the prospects of the Andhra Pradesh Tourism Development Corporation (APTDC) and local star hotels in Visakhapatnam district.

“Owing to the protests, the occupancy rates, particularly in two and three-star hotels, have fallen drastically over the last three weeks. We will not be able to even pay salaries to our employees if this situation continues,” M Raghavendra Rao, managing director, Daspalla Group of Hotels, told Business Standard.

The Daspalla Group operates three hotels and six restaurants in Visakhapatnam and Kakinada (the district headquarters of East Godavari). Occupancy rates at these hotels have seen a decline of 20 per cent while sales at the restaurants have dropped sharply 30 per cent.

“Attendance in wedding parties is also seeing a decline of 20-25 per cent as against high expectations of wedding party organisers. Besides, staff attendance has fallen 8-10 per cent,” Rao said, adding while the group’s revenues were being affected badly, fixed expenditures were only increasing.

However, the five-star hotels in the region are seeing only 5-10 per cent decline in the occupancy rates as most of their clients have their own cars or are hiring cabs. Hence, the impact is a bit low on four and five-star hotels, said KM Rao, general manager (business development), Green Park Hotels.

The bandh is showing an adverse affect on the business prospects of APTDC with the occupancy rates at its tourism guest houses, especially at its properties in the Agency areas, being hit since the last three weeks, according to Bhima Sankaram, deputy general manager, APTDC.

APTDC operates tourism guest houses at Araku, Anantagiri, Tyda, Rushikonda and Visakhapatnam with about 290 rooms. “This is a peak time for our business. We see a large number of tourist arrivals from West Bengal and Odisha to Vizag and our occupancy rates during this time would be 90-100 per cent. However, the occupancy rates have now plunged to 30 per cent in Araku, Anantagiri and Tyda guest houses, while the properties in Rushikonda and Visakhapatnam are seeing a decline of 50-60 per cent,” he said.

Visitors are cancelling their tours to these places because of the agitation, Sankaram said, adding with a dip in tourist arrivals and reduced sales at its restaurants, APTDC had temporarily suspended some of its packaged tours.