New Year season brings cheer to hospitality sector

HYDERABAD:The hospitality  sector, which suffered a blow last year due to demonetisation, is looking to make for the losses this season. According to industry sources, hotels, restaurants  and hang-out joints are witnessing heavy footfalls ahead of New Year.“Last year, the New Year season was a dampener for the hospitality sector  due to demonetisation. But this year, things have returned to normalcy and the sector is witnessing a positive mood,” said D V S Soma Raju, executive director of Katriya  Hotel and Towers, who is also the vice-president of South India Hotels and  Restaurants Association.

Among the factors that have helped the sector, according to him, is reduction of GST rates. “It has come down from 18 per cent to 12 per cent on rooms costing less than Rs 7,000 and to 5 per cent on eating in restaurants, thus giving a fillip to customers preferring budget stay and holidaying. Compared to last year, occupation of rooms in  Hyderabad has also grown this year.”

Normally,  the November to February period is seen as a peak season for the hospitality sector in southern India, with business touching the highest point during new year. According to experts, while the hospitality sector has grown at 15 per cent all over south India, it has grown by more than 15 per cent in Hyderabad and the city has an inventory of about 25,000 rooms right now.

Owing to the increase in both business and holiday travel, the sector  has seen increasing activity this year. Interestingly, it is budget hotels and niche quick service restaurants (QSRs) which are drawing more customers.

However, Vikram Simha Akula, who runs IndiBlaze, a QSR said, “The hospitality sector in Hyderabad  has been a victim of oversupply in the past few years, adding, “While hotels  offering rooms with focus on long-term business growth are experiencing a positive mood with the rise in the number of international conferences, meetings and  MICE activity are increasing, in terms of eateries and QSRs, establishments offering routine stuff are losing out.”

He noted that places offering specialised  cuisine or experiences are drawing customers during the new year holiday season and right now, the mood in the sector is positive compared to last season.