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The Lalit Chandigarh intensifies competition among the 5-star hotels

Hoteliers mentioned that the supply and demand are not in sync, as a result the city is facing oversupply

Vijay C Roy  |  Chandigarh 

With the opening of The Lalit Chandigarh, a five-star hotel by the Lalit Suri Hospitality Group, the competition in the five-star category hotels in Chandigarh has intensified.

Hoteliers mentioned that the supply and demand are not in sync. As a result, the city is facing oversupply. They further mentioned that since the market had not grown, the hoteliers had to concentrate on operational efficiencies to have bigger share of the existing pie.

Chandigarh has three five-star properties — The Taj (149 rooms), JW Marriot(164 rooms), Mountview(156 rooms).

Fueling competition, also announced its commercial operation on Wednesday and would offer 179 rooms. Located in Rajiv Gandhi — Chandigarh’s business hub and spread across four acres — the group has invested Rs 400 crore in the property.

Speaking to Business Standard, Manmohan Singh Kohli, Chairman, Hotel Industry Association of Chandigarh said, “ In the five star category, Chandigarh is very highly competitive market and the opening of Lalit has further fueled the competition. If we consider the current scenario, the supply and demand are not in sync, as a result we are facing oversupply crisis. In last few year, the visitors numbers has not grown, or in other orders we can say there is oversupply. In order to sustain in this market, the five star properties have to concentrate on efficiency and will more depend upon how well one perform, as every property has its unique characteristics.”

He added that in last few years no major project has come to city which has resulted in stagnancy in growth. It is worth mentioning that earlier the hotel Industry was banking on the expansion of for growth but with the quashing of further land acquisition for the expansion of the has proved as stumbling block for the Industry.’

However, he anticipated that in near future it may pick up with the upcoming International Airport at Chandigarh.

Echoing similar sentiments, Sandeep Makroo, Director, Sales-Marketing, Taj(Chandigarh) said, “ This is beyond doubt that there is oversupply in the market with an average occupancy rate of 55-60% in five star category. The opening of the new property will further intensify the competition as everybody would try to have large share of the existing market which is stagnant.”

He also added that in order to sustain there should be a proper mix of F & B business and Inventories(Revenue from Room tariff).

Analyst mentioned that the increase in demand that the hotel Industry expected is not happening at the moment. There are too many rooms available and that means the competition will increase and prices will may come down.

First Published: Wed, January 15 2014. 20:55 IST