Tamil Nadu’s hospitality trade in the doldrums

December 8th, 2008 - 10:42 am ICT by IANS  

Chennai, Dec 8 (IANS) Tamil Nadu’s hospitality industry has taken a knocking this year. Already hit by the after-effects of the global economic slowdown, the terror attacks in Mumbai now threaten to take a further toll on hotel occupancy in the peak tourist season in winter.The hospitality industry is expected to be poorer by at least Rs.6 billion (Rs.600 crore) this season.

While hotel industry representatives downplay the downturn, analysts say around 40 percent of the earnings of the Rs.15-billion (Rs.1,500 crore) hospitality business in this southern state may be knocked off.

“Though many foreign group bookings have been cancelled and hotel occupancy has fallen across the board, it is too early to quantify the losses since it is the start of the season,” said M.P. Purushottaman, president of the Federation of Hotel and Restaurant Association of India, who also heads the South India Hotels and Restaurants’ Association.

Purushottaman refused to comment on reports of resource crunch affecting his five-star hotel project in the southern outskirts of the city. There are reports of two other similar projects being affected.

Smaller hotels, which were banking on the India-England cricket Test scheduled to begin Dec 11 to attract English fans - popularly known as the ‘Barmy Army’ - have also been hit.

Said S. Nathan, who heads a three-star hotel not far from the M.A. Chidambaram Stadium, the first Test’s venue: “When compared to the rest of India, Chennai is a haven of peace. But though the English security expert (Reg Dickason) has said there are no security concerns, over 30 percent of English fans have cancelled bookings.”

Worse, popular discontent in Tamil Nadu over the civil strife in Sri Lanka has resulted in many local tourists cancelling trips.

Everything was fine till September, with the tourism ministry predicting a 31 percent growth for the state’s Rs.15-billion hotel industry based on the past two years’ trend.

In 2007, a little over 1.75 million foreign tourists - around one-third of visitors to India - came to Chennai, contributing nearly Rs.2.7 billion to the state’s hospitality industry.

The number of local tourists was some three times the figure till September.

Many tourists also came to take a look at the controversial Ram Sethu, or Adam’s Bridge, which Hindus believe is the bridge referred to in the Ramayana.

The hospitality industry then had grown richer by a little over Rs.4 billion as tourists coming to see the Ram Sethu also visited the cities of Madurai, Tiruchirappalli and the hill stations of Kodaikanal and Ooty.

But indications are that the negative growth now may go beyond 40 percent, officials at five-star hotels belonging to the Taj and ITC groups here told IANS.

There are other factors that have negatively affected the tourist season, which begins in the first week of December - the ‘peak’ of south India’s mild winter.

A four-day long heavy downpour flooded most parts of the city. Along with fears of electricity outages, reports of health hazards have hurt the inflow of indigenous tourists too, said P.N. Srinivasan, who owns a string of guest houses here.

The electricity shortage that has near-crippled the garment industry here and at Tirupur has contributed its mite as international clients, who came in droves till recently, are suddenly scarce.

The booming automobile industry has also been hit by the meltdown, and the number of visiting executives has thinned, resulting in lesser occupancies in hotels.

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