Telangana turns New Year cold

Hotels in Andhra see 25% drop in occupancy rate.

The average occupancy rate of star hotels in Andhra Pradesh dropped 25 per cent in the last fortnight in the wake of Telangana agitation. In the process, they have suffered an estimated revenue loss of over Rs 35 crore.

“There could be a 30 to 50 per cent drop in the business for the hotels across the state in the first half of this month,” said Ram Misra, president, Hotels and Restaurants Association of Andhra Pradesh. The association has 60 hotels, including three, four and five-star categories, as its members. In normal days, the occupancy rate is about 65 per cent.

“Many hotels are seeing cancellations of conferences, reduced arrivals, lower occupancy and drop in orders for food and beverages,” said Misra. While hotels in Hyderabad suffered the damage early this week, those in Andhra and Rayalaseema region are still bearing the brunt.

“We have an account of conferences. But that is small. We actually do not have any measure of the business that stopped outside itself,”' said George Verghese, general manager of ITC Kakatiya.

Inner Circle lost over Rs 10 lakh in the last week. “Two conferences - one of a pharma company and another of an engineering group — were cancelled,” said Pradeep Dutta, general manager of the three-star hotel.

In all, there are over 3,025 rooms across three, four and five-star categories in Andhra Pradesh (including Hyderabad). The average room rent is Rs 6,500. Turnover from branded hotels in the city is estimated to be Rs 350-400 crore a year with food and beverages contributing 25 per cent to the total revenues.

The hotels are also finding it difficult to estimate the number of guests. “We normally take a guarantee from clients on the number of guests before preparing the food. But now they are unable to inform us as many are not travelling from others cities and states to Andhra Pradesh,” said Misra.

DV Manor in Vijaywada, which is the epicentre for the unified Andhra agitation, said business was dismal. “Occupancy has dropped from 70 per cent earlier to 20 per cent now. The hotel has also seen cancellations of corporate and private events even as food and beverages segment has taken a hit,” said Rajesh Berry, vice-president and general manager.

Officials at Taj Krishna in Hyderabad, however, said, “There is no impact of the turmoil on the business as of now.”

The industry, which usually looks forward to the year-end celebrations, is likely to go slow on most of its plans. “Many hotels will tone down their New Year celebrations if the situation continues to remain tense,” said Misra, who is also the general manager (Andhra Pradesh) of Fortune Hotels.