Business travellers to Chennai, who dominate the lodging segment of the city’s hospitality sector, will get more options to choose from with the state capital expected to add 3,000-plus rooms in the next few years.
Chennai already has 29 branded hotels with 4,656 rooms across different categories. And according to a recent hotel intelligence report from Jones Lang La Salle, around 3,620 new hotel rooms in the branded segment are expected to be operational in the city over the next three years.
Taking the lead in the new additions list, Leela group added 326-rooms to the city’s branded hotel segment last week. The 36,000-sq ft venture at R.A. Puram is said to be South India’s first sea-facing hotel.
Lodging demand in Chennai is dominated by the business segment which accounts for 70-75 per cent of the total demand.
The meetings, incentives, conferences and exhibitions (MICE) segment occupies 10-15 per cent and leisure 5-10 per cent of the demand. “Chennai has rapidly evolved into a global business and technology hub,” said Rajiv Kaul, president of The Leela Palaces, Hotels, and Resorts.
Around 17 hotels with an inventory of 3,620 rooms in the branded segment are under construction besides an inventory of almost 2,500 rooms are in various stages of planning. All these may be operational in the next five to seven years.
However, creation of such huge capacities, especially in the wake of current economic situation, is expected to create a few constraints in occupancy rates during the next couple of years.
“In the near term, we expect market wide average rates and occupancy levels to remain constrained as new supplies open up in 2012 and 2013,” says the study.
However, the adverse impact is expected to be short-lived with significant commercial and industrial developments being planned across the city, it added.