Kolkata is feeling the strain of the credit crunch and no more so than the hospitality industry.
Of the 19 hotel projects that were to begin operations in 2011-12, adding over 5,000 star-category rooms, at least six have been delayed, five put on the backburner and one shelved following reversals that developers faced over the past year. The seven projects that are on track will add 1,365 rooms in the city and its surroundings. Though Confederation of Real Estate Developers Association of India (CREDAI) had warned of a 12- to 18-month delay in the hotel projects after tourist traffic dipped and corporate travel nose-dived towards the end of last year, the situation is turning grimmer.
“About four-five years ago, a flurry of hotel projects was announced in Kolkata,” said CREDAI Bengal president Pradeep Sureka. “At that time, investment sentiment was riding an all-time high, with Kolkata projected as the next big destination. Industry captains streamed in, triggering more frequent visits by executives. There was every indication that rooms would be occupied as soon as capacity addition took place. Hence, lot of hoteliers and real estate developers jumped in. But the situation has changed. Not only has Kolkata lost the prime investment destination tag, the meltown has jolted the hospitality industry,” he added. In fact, a lot of developers who had jumped onto the hospitality bandwagon are now trying to get out. “At a time when everyone is battling a financial crisis, operating in a non-core sector is a strict no-no. That is what many have realized,” Sureka explained.
A kilometre-long section of the Eastern Metropolitan Bypass between Science City and the SilverSpring condominium project, that was to emerge as a hotel hub, will continue to have ITC Sonar as the sole destination. The latter does have plans to add a super-luxury property with 450-plus rooms, but plans are yet to be finalized. “ITC’s expansion plan is definitely on. But it will take some time for a project of this size to take off,” said ITC Welcomgroup eastern region chief Ranvir Bhandari. There is, however, no discernible progress on the four star hotel projects in the neighbourhood. The promoters Emaar-MGF, DLF and Apeejay Surendra look content to keep the plots idle. “Companies will not pump cash into new projects if no returns are assured in two-three years,” said an executive of one of the companies. No one, though, was willing to make an official comment. Officials of The Park were not available for comment, while Emaar-MGF bosses maintained a stoic silence. A senior DLF official said construction would begin by the end of this year and completed by 2012. “We will start work once the liquidy crunch eases,” he said.
Tags: Hotels, Kolkata hotels, Kolkata Property, West Bengal
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