The Telegraph
Wednesday , October 10 , 2012
Since 1st March, 1999
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Slowdown hits hotels hard

- Business travel ebbs, hope on weddings

If Tata Steel sneezes, Jamshedpur’s hospitality industry catches a chill and waits for a recovery pill in the form of the Big Fat Indian Wedding.

Of the around 60 hotels of the city, most are reporting less or around 50 per cent occupancy, said a gloomy Prabhakar Singh, president of Jamshedpur Hoteliers’ Association and owner of Hotel South Park in Bistupur.

Insiders point to a triple whammy.

Tata Steel’s expansion project — raising crude steel capacity from 6.8MT to 9.7MT per annum — is inching towards its March 2013 deadline, with the effect that visiting experts from India and abroad who had been staying in city hotels for days and months on end, are reduced to a trickle.

Two, the recent government order stalling construction work on 59 sub-leased plots has also, similarly, plugged the entry of business travellers to the city and its high street hotels.

Overall, the global recession hasn’t helped matters either. Companies are being more careful with their money instead of splurging on travel and hotel stays.

The only great hospitality hope on the horizon — a feeling that gold jewellers share despite bizarre price hikes of the yellow metal — is that Indians never ever skimp on weddings.

November rings in a long winter-spring wedding season.

“We are eyeing November. The last couple of months were bad. Almost all hotels are reporting below 50 per cent occupancy. The flow of business travellers directly or indirectly related to Tata Steel expansion plans have decreased. To add to our misery, the government order stalling construction and the ripple effect of a global slowdown have virtually left us twiddling our thumbs,” rued Singh.

In the last few years, hotel insiders were celebrating the regular check-ins of executives from L&T, Thermax, Tata Honeywell and MN Dastur, all in some way related to the expansion inside the steel major’s works. Occupancy hovered at a high 90-95 per cent round the year.

Singh agreed that they were cushioned from the global downswing in 2008-09 as Tata Steel was on an expansion drive.

“Four years ago, the situation was different. As big-ticket expansion projects of Tata Steel and Tata Motors and greenfield Tata Bluescope were commissioned, we had an impressive flow of foreign visitors. But now the situation is completely different,” said Singh.

Now, high street hotels like Fortune Hotel Centre Point in Bistupur, with 45 luxury rooms, are mourning the heydays. Its managing director Smita Parikh confessed that their occupancy rate on Tuesday was 57 per cent.

“It is one of our toughest times. Visitors from Tata Steel, our biggest client, and from other institutions, have decreased. The government directive that stopped construction of mega projects hammered the last nail as far as we are concerned,” Parikh said.

Only band, baaja and barati will fill the empty rooms again, it seems.

Will weddings bail out the hospitality industry?