Floods wash out hotel revenues in Chennai

Chennai: The year 2015 has been billed as the “driest year” for Indian hospitality sector even as the December deluge in Chennai washed away revenues, besides damaging the properties.

“The winter months in India are the most favoured ones for tourist movement – both Indian and foreign - increasing occupancy and gross revenues for hotels with increased take in food and beverage outlets. Unfortunately, Tamil Nadu, a favoured destination in the festival season, was battered with incessant rains and floods causing heavy damage to life and property. Some of our members faced huge losses due to largescale cancellations and damage owing to floods,” says K. Syama Raju, president, South India Hotels and Restaurants Association (SIHRA).

The year gone by saw the smallest addition to chain affiliated hotel inventory in the last seven years – only 7,853 new rooms nationally. Terming 2015 as the “driest” year in terms of chain affiliation deals and new projects, the STR Global’s India Hotel Review says the performance of hotels across the nation declined due to lack of business confidence in the economy and industry.

According to the report, while the all-India occupancy in hotels rose by 3.3 points to 62%, and RevPAR by 5% points, the average room rates (ARRs), a vital indicator of hotel performance, continued to decline due to lack of business confidence in the economy and industry.

The rates declined by half a point nationally in 2015. Among the key cities, Mumbai and Goa registered occupancy above 70 per cent mark. Mumbai, Bangalore, Hyderabad, Pune and Jaipur achieved their highest city occupancy after 2008. However, Kolkata, Goa and Chennai showed marginal decline in occupancies compared to 2014.

According to industry sources, Chennai, recovering well from the supply surge in recent years, had performed well in the first half of 2015 gaining 8.6 points occupancy.