Hoteliers in Andhra Pradesh are facing a tough time due to low occupancy; many of them are even running in losses.
Vijayawada:Hoteliers in Andhra Pradesh are facing a tough time due to low occupancy; many of them are even running in losses.
A major component of their expenses is power, which comes to nearly ₹10–15 lakh per month for some. They pay property tax of around ₹10 lakh or so for two quarters depending on their area and location. They need to pay 18 per cent APGST.
Hoteliers say patronage for function halls and banquet halls is dwindling, as people are preferring hotels which can offer food for ₹1,000 per plate. They point out that their occupancy used to be less than 50 per cent. However, with the change in government, it has slowly risen to 60–70 per cent at present. Their operation costs are high, especially for star hotels. The salary of a general manager is around ₹3 lakh per month and ₹1 lakh for senior managerial staff.
Lack of adequate entertainment in some major towns and cities, including Vijayawada, is one of the major hurdles for the hospitality sector to grow. This forces All India Service and other senior officers to go back to their families staying in Hyderabad for the weekend. There are many places of entertainment in the metro city of Hyderabad. People can loiter around till late in the night.
Hoteliers say lack of such facilities in Vijayawada and other cities and towns of AP is having its impact on the occupancy of their hotels.
Significantly, some hoteliers have called on Chief Minister N. Chandrababu Naidu and submitted a representation seeking industry status for the hospitality sector. They say they have received a positive response, with a bill in this regard quite likely becoming a law.
Hoteliers, however, maintain that only new projects will benefit from the industry status. They want some relaxation given in the interim, so that their business can turn viable.
AP Hotels Association president R.V. Swamy said, “Our state has nearly 48 star hotels. But our business is becoming unviable for want of patronage. If the state government gives us some relaxations in power tariff, property tax and bank loans, these may help us sustain ourselves.
They have sought relaxation in power tariff by 30–50 per cent, so that it will help them save money to meet other expenses.
