ITC Grand Chola, Park Hyatt and Leela Palace are gearing up to launch soon in Chennai which would set to add 1,000 new luxury rooms. According to industry experts the addition of these new hotels may result in a marginal fall of the room rates across the city.

While the 600-key ITC Grand Chola is planning to launch 450 rooms in the first phase and Leela Palace 250 rooms (of 326), Park Hyatt will throw in another 100 (of its 201 rooms) initially. Incidentally, the General Managers of all three hotels are of French origin.

On one side where the economy is slowing and hotel occupancy are expected to take a beating, every single room added will have a three-pronged impact — on occupancy, rates and staff attrition, says T. Nataraajan, Honorary Secretary, South India Hotels and Restaurants Association (SIHRA), and CEO, GRT Hotels and Resorts, a hotel chain in the South.

There are currently fifteen 5 star hotels in Chennai having an occupancy level of around 65% from over 2,800 rooms operating at an average rate of Rs 6,500. There would be over 30% rooms added by the end of September or early October. Due this increase many hotels may have to consider downward revision of rates and may need to go that extra mile to retain staff till things settle down, he says. As it is, hotel rooms in the city are sold at 30-45 per cent discounts on the published tariff.

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