According to a source in the hospitality industry, the hotel projects proposed on SG highway have the potential to generate good business and attract more crowds.
Is SG highway becoming a hub for the growing hospitality industry in Ahmedabad? Yes, it is. According to a source in the hospitality industry, the hotel projects proposed on SG highway have the potential to generate good business and attract more crowds.
Some 15 hotel projects are likely to be launched by the end of March 2011 in western Ahmedabad. Of these, around six to seven hotels will come up on SG highway alone. These projects will involve an investment of around Rs1,500 crore, added the industry source.
CMD of The Grand Bhagwati Group, Narendra Somani said, "SG Highway is one of the most happening areas in the city and has successfully managed to create an identity of its own. So, it is not surprising that players like Welcome Group, Cambay Resorts, Orchid, Marriott Group are coming up with more projects, along with many other local developers, on this belt."
Of the 15 ongoing hotel projects, four to five will come up in western Ahmedabad by the end of this financial year. Of these, about two are expected to come up on SG highway, added Somani.
Most of these hotels are of the four-star and five-star category. With the coming up of new hotels in western Ahmedabad, over 2,500 rooms will be added to the current supply. This will increase competition among the hoteliers, the experts predict.
Currently, there would be around 2,000 rooms available in the western part of the city, and hoteliers are, even now, offering good discounts on the tariffs. With the addition of over 2,500 rooms the situation can get worse.
Commenting on the same, chairman of Hotel and Restaurant Association of Gujarat, Tulsi Tekwani said that initially, for the next two to three years many hotels may have to face a tough time. However, the supply will be matched by the demand. "The way Gujarat is growing, we will see more companies and industries establishing here. This, directly or indirectly, will support the hospitality industry," Tekwani said.
The hospitality industry is largely dependent on the corporates and the multi-national companies. But, seeing from the local angle, the banquet business is an icing on the cake during wedding and festive season.
Most hotels on SG Highway have better prospects for good business during wedding season. Reason for this has been attributed to two factors - the hotels have huge premises for hosting weddings and the tendency of Gujaratis to spend more on weddings, added Tekwani.
Tekwani added that the food and beverage (F&B) along with the banquet business is not going to be affected by economic slowdown. Also, since the hotels are on the highway they are serves as the most appropriate venue for hosting wedding ceremonies.
But it is true that with so many hotels coming up in city, there will be greater competition among hoteliers, and it is possible that these star hotels have to reduce their room
tariffs to survive.
A hotelier said on condition of anonymity, "Initially, the hotels may have to reduce their room tariffs by around 20 percent; offering only discounts may not help. This will substantially reduce the margin between the three, four and five star room tariffs."
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