Hotel industry in dire straits

The city and the surrounding areas have witnessed a fall of 10 to 15 per cent in the number of tourists compared to last year

Published: 24th October 2013 11:32 AM  |   Last Updated: 24th October 2013 11:32 AM   |  A+A-


The prevailing slowdown in the US and European economies seems to have taken its toll on the hotel industry in the city. Though the tourist season commenced in September this year, over 50 per cent of the hotel rooms in the city remain unoccupied owing to the drop in number of visitors to God’s Own Country. The city and the surrounding areas have witnessed a fall of 10 to 15 per cent in the number of tourists compared to the number last year. The situation is so bad that some hotels in the city are on the verge of closure. As per sources the number of hotel rooms has registered a steep increase in the past few years but the tourism business is not growing in tandem with it.

There are over 5,000 hotel rooms in supply in Kochi and adjacent areas across all the categories only less than half the number are occupied now. Increased operational cost and high wages are the major hurdles faced by the industry now, sources said.

Riaz Ahmed, managing director, Abad Hotels India Private Ltd, said that earlier hotels with 30 to 50 rooms were opened in the city but with the entry of corporate brands, hotels with 150 to 200 rooms have become common.

“There is huge supply of rooms now but the demand is less which has created an imbalance in the industry. Though the power charges have increased by over 60 per cent in a span of one year, the hotel charges have not gone up in proportion and the industry is in dire straits. There is a fall in the number of domestic tourists as well,” he said.

As per the industry estimate, 0.8 per cent of the global tourists visit India annually of which 10 per cent come to Kerala. In Kerala, there are around 15,000 rooms in supply in 500 hotels across the state. The pricing of hotel rooms in Kochi has increased by 10 to 15 per cent in the past one year.

Johny Abraham George, chairman and managing director, Intersight Tours and Travels, said that the tourist season so far has been bleak because of the higher air fares. “There are cheaper destinations like Sri Lanka and Malaysia which pose a major threat for the state. As the slowdown in major economies remains, Kerala as a tourist spot will be hit,” he said.

T N Jayasankar, Secretary, District Tourism Promotion Council (DTPC), said that though the season was weak a turn around is expected by the mid-November.

“The pricing remains a key challenge in the tourism industry now,” he pointed out.


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