IT sector lull hits business travel, hotel occupancies

Tags: News
Despite being almost halfway into the six-month long season, hotel industry is witnessing decline in occupancy from the business travel segment. Sectors like manufacturing and banking have not been able to make up for the lull in the IT sector.

“Business travel continues to be shaky and slow. The lull from the IT sector continues and the macroeconomic conditions in the Europe and the US has been impacting the sector,” said Sanjay Sethi, CEO and managing director of Ber­ggruen Hotels.

According to R Rangachari, advisor, South India Hotels and Restaurants Association, in terms of occupancies, business travel is seeing around 10 per cent dip against the same season last year. “The decline from the IT sector is around 20 per cent. The sector is directly impacted by the global economic developments. Travel itself has come down. Further, except for the top management people, most of the travelling IT professionals have been using serviced apartments than hotels,” he said.

Some of the sectors that have helped the hospitality industry in the occupancy front are manufacturing and banking.

“Officials from the manufacturing sector have been coming and going, but they too are not staying longer. There could be a growth of around 15 per cent in their occupancy against last year,” he said. However, the growth in these segments has not been able to compensate for the lull in IT.

Further, not much activity has been happening around meetings, incentives, conferences and entertainment (MICE) segment. The addition of new rooms and surplus inventory levels has been plaguing occupancy in many cities. “Despite well into the season most of the hotels have to remain competitive on the tariff front because of the high levels of inventory. A city like Chennai has added more than 1,500 rooms and a slowdown in MICE activities has gone against occupancies,” said T Natarajan, CEO, GRT Hotels and Resorts.


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