The Hindu Business Line : Chennai to have 3,000 more star hotel rooms by 2008-09

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Chennai Feb. 2 Chennai's inventory of hotel rooms in the three to five-star category will increase by more than 3,000 by 2008-09 when some of the hotel projects under construction are commissioned. Currently, the city has about 5,000 quality rooms.

In 2006, the city added about 650 rooms, including Fortune Select and Courtyard by Marriott, mainly business hotels.

The hospitality sector last year was buoyant with occupancies between 75 and 80 per cent, even during the traditional lean season, according to senior hotel industry sources. The average room rate (ARR) was about Rs 5,000, the sources said.

Corporate travel, both international and domestic, has kept occupancies high in the city. Last year, IT and ITES companies such as i-flex Solutions, EDS, Visteon and IBM to name a few, opened offices in Chennai.

Mr Ramesh Nair, Local Director, South India Head of Market, Jones Lang LaSalle, international property consultants, said that last year 4.9 million sq ft of quality office space was absorbed out of a supply of 5 million sq ft. (In 2005, 3.7 million sq ft of office space was absorbed, he said.)

Two five-star deluxe hotels, Leela and JW Marriott (more than 600 rooms), are scheduled to come up on the estuary near the Adyar river. Early 2008 will also see the launch of 210 serviced apartments under the Somerset brand from the Singapore-based Ascott Group.

Two hotels, the 550-room ITC hotel and the 200-room Ceebros hotel, are coming up on Anna Salai, Chennai's arterial road.

A five-star hotel is also planned inside the Express Estates, sources said. The Taj GVK on Clubhouse Road is still under construction.

The Old Mahabalipuram Road (OMR) has also become a preferred location for hotel companies. Real estate sources say a number of hotel companies are scouting for land on the OMR. Deccan Park Ltd will be investing Rs 15 crore to develop a 66-room, vegetarian hotel on this road, which would be ready in 2008, Mr Nirmal Gadhiya, Director-Deccan Park, said.

Fortune Select, ITC's mid-segment brand with 129 rooms, which opened last year, caters to the IT companies on this road and has room rates averaging about Rs 4,000, Mr R. Ramani, General Manager, Fortune Select said. Another Fortune hotel in the resort category is coming up at Mahabalipuram.

Hilton, which has tied up with the Empee Group to develop a 253-room five-star deluxe hotel on the Inner Ring Road, has entered into a joint venture with real estate major DLF Ltd to set up hotels in Indian cities, including Chennai.