Growing demand for economy hotels in smaller towns

Till now the focus of the hospitality industry in Andhra Pradesh was on cities like Hyderabad, Vijayawada and Visakhapatnam.

But with the commercial growth of smaller towns like Adilabad, Anantapur, Bhimavaram, Nizamabad, Chittoor and Eluru, these too are slowly emerging as potential destinations for setting up of economy hotels.

Development of infrastructure facilitating travel, besides commercial growth of these centres are reported to be the driving factors behind the growing demand for hotels. Besides, low quality of services at the existing hotels is also generating a need for better quality hotels in these towns.

For instance, according to an assessment done by Apitco Limited, a technical consultancy services organisation, Adilabad sees a huge number of bank auditors, seed and fertiliser company representatives and cotton traders from Hyderabad frequenting the town. But at present, the town has just one hotel with 90 rooms and that too is stated to be below average.

"This town, therefore, requires good accommodation facilities for the growing number of businessmen who frequently visit the place," B Srinivas, senior consultant, Apitco Limited, said. Apitco has taken into consideration hotels with a room tariff of over Rs 400 for the purpose of assessment, excluding four-star and five-star hotels.

Similarly, Anantapur is close to Puttaparthi and is an educational and medical centre as well. This apart, it is located on the Hyderabad-Bangalore route which makes it a highly potential place for setting up of economy hotels. At present, the town has one three-star hotel besides five non-star hotels with the total room strength being around 260.

Chittoor, which has a total supply of 222 rooms, also has additional requirements in this regard as it is slated to be a commercial centre for granite and food processing industries besides being popular for mango trading. So, apart from tourists, there are businessmen and traders visiting the town as well.

Nizamabad hotels that have a total room strength of 95 too are unable to satisfy the demand for more rooms in summer and even during marriages.

This apart, it is close to Basara (temple town) where tourist inflow is increasing by the day. Traders from Mumbai are also visiting the place for potential business opportunities.

The growing demand for hotel rooms here has been untapped. Eluru, Guntur, Kadapa, Kakinada, Karimnagar, Kurnool, Mahbubnagar, Nellore and Rajahmundry are some of the other potential towns for setting up of economy hotels.

"With roads being built across all districts, tourism potential in these towns has increased. A fallout of the focus on building infrastructure in these headquarters has also been that now vehicle dealers, petroleum companies, pharma companies, banks, engineering colleges, and telecom service providers are setting up their centres at these places. This is fuelling the demand for economy hotels in these towns," Srinivas added.

According to Apitco assessment, at least 60 per cent of the occupancy can be assured if companies and individuals come forward to set up economy hotels at these places. "For the economy hotels, the average room tariff should be between Rs 800 and Rs 1,000 per day," he said.

"Hyderabad, Vijayawada and Vizag are also attractive destinations for setting up of economy hotels. But at present, they require more number of five-star and three-star hotels," Srinivas said.

While Hyderabad requires at least 1,000 more rooms as on date, Vijayawada is expected to require a minimum of 500 more rooms because of the Kalachakra Buddhist ceremony, scheduled to be held in January 2006 at Amaravati.