Hyderabad hotel industry sees peak demand

The hotel industry in the twin cities is jubiliant these days because they are running at almost 100 per cent occupancy since the past few days.

Though the period between October-February season is the peak season for the hotels in the city, this January turned out to be a money-spinner for the hoteliers, with all their rooms brimming with customers.

There is severe demand for the rooms this season as around twenty national and international conferences and events are slated to be organised here during this season.

It all began with the CII Partnership Summit which was held from January 7 to 9, followed by Gitex 2004, the Asian IT Ministers' Summit, Nasscom's iTech 2004 and then more than half-a-dozen pharma-related seminars and conferences.

Even, Joyce Meyer, with her Gospel mission last week, was also responsible for the all rooms getting sold out like hot cakes.

Especially, the deluxe hotels in the city that include all star category ones, are doing roaring business.

Says, Veer Vijay Singh, the area director and general manager of Taj GVK Hotels and president of Hotels & Restaurants Association of Andhra Pradesh: "The occupancy levels at almost all the hotels are at their peak this season because of a lot of corporate activity. The city, which was once known for granite, textile and pharma industries, has now become an IT, BPO and banking hub."

The average room occupancy levels for the hotels, which were at 50 to 60 per cent three years ago have climbed upto over 72 per cent now. The average revenue per room (ARR) too went up steeply.

For instance, Taj Krishna's ARR shot up to Rs 4,599 from the Rs 1,600 level three years back. Similarly, Taj Residency and Taj Banjara, which are the other two Taj group hotels, saw their ARR going up from Rs 1,500 to Rs 3,500 now.

The visiting corporate executives feel that there is a large supply-demand gap in the deluxe hotel category.

"With so many international event organisers choosing Hyderabad as a stage for organising their shows here, the city needs to at least double the existing room strength (inventory)," said a public sector bank executive, who could not find a star hotel accommodation last week and had to be content with a Yatri Nivas room.

However, Veer Vijay Singh denies the demand-supply gap argument, saying that there is no such problem existing. The number of deluxe hotel rooms in the city has increased to 3000 from 2000 in the year 1997.

The number of foreign visitors too has increased sharply to 60 per cent of the total visitors, up from 35 per cent five years back.

Veer Vijay Singh says that tourism is not catching up as expected, and it is in fact the corporate business that is providing them major revenues.

Even the foreign guests at our hotels mainly comprise of corporate executives rather than the tourists, he feels. Singh is confident that the present boom will continue even after the peak season that ends in February.

Seeing the booming demand for the hotels, many new projects are coming up which will add at least another 1,000 rooms in the next 18 to 24 months.