Guests jostle for space in Hyderabad

Year 2006 has started with a big bang for Hyderabad when it comes to MICE (meetings, incentives, conferences and events).

In fact, it's destination Hyderabad for such happenings, what with the city playing host to events ranging from the national conference on very large scale integration (VLSI) to the plenary session of the Congress.

And just when Hyderabad thought that it's had enough for the first quarter, US President George Bush decided to touch down on the city for a few hours. Well, the gravy train has not stopped rolling as yet, for in May the city will witness nearly 3,000 delegates flying down for the Asian Development Bank's 39th annual meeting.

That the increasing influx of corporate travellers has squeezed out the capacity of the hospitality industry in the city is a no-brainer. But what's interesting to note is that the shortage of hotel rooms and increasing visibility of the city on the global map have opened the doors for service apartments and guest houses in the city.

According to Imran Naqvi, branch manager with Friends Globe Travels Limited, a division of FCm Travel Solutions, service apartments and guest houses are in huge demand in the city now.

"In fact, so staggering is the demand that the prices of these 70-odd rooms have spiralled by around 75 per cent over the last eight-odd months," he adds.

Ashwin Jain, partner with Serenity Inn that provides service apartments and guest houses in the city, however, disagrees.

"When we started this business eight months back, we were offering rooms at the rate of Rs 900 per day, lower than the market rates of around Rs 1,200. The market rates have remained at Rs 1,200 over the last eight months and we have just appreciated our rates to be on par with what the market is charging," Jain explains.

Giving the rationale for the popularity of guest houses and service apartments, Jain says that any high-end hotel room in the city comes for around Rs 9,000 per day.

"On the other hand, what we offer comes for as less as Rs 1,200. Besides, service apartments are not only fully furnished but also offer additional benefits like common gymnasium, lounge area, kitchen and Wi-Fi connectivity. So there is a cost advantage as well," he adds.

"Right now, we are running at full capacity," Jain says, echoing the sentiments of most of the hotel operators in the city. In fact, according to a spokesperson from ITC Hotel Kakatiya Sheraton & Towers, all their rooms have been booked for the next few months.

The hospitality industry is, however, not complacent with its present roaring business and is gearing up to meet the competition from service apartments and guest houses head-on. Attempts are being made to fill the demand-supply gap.

According to reports, there are around 1,280 high-end hotel rooms in the city. This is, however, expected to increase to 2,650 by 2009-10, not just with the existing hotels increasing their capacity but with greenfield ventures dotting the landscape as well.

Jain, however, is not a worried man. With his sights trained on growing business, he is now dabbling with the idea of getting into the business of constructing service apartments and guest houses in the city.

At present, Serenity Inn takes these properties on lease and turns them into service apartments or guest houses.