Situation Looks Grim for Kolkata Hotel Projects

f the city dreamt of emerging as a hospitality hub, that dream is fast turning ephemeral, with more than half the projects either delayed or close to being shelved. 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.
The only project on the Bypass where construction appeared to be moving full steam ahead is the Taj Gateway, near the Ruby island. Foundation piling is currently under way in the 200-room business hotel project. Another epicentre of the crisis that has struck hospitality projects is in New Town. Of the six projects proposed there, two are doubtful and two delayed. Realty major Bengal Unitech Universal, which took a hit following the meltdown, has put the convention centre in the backburner for now. Two hotels were to be located at this site. The only project that is still alive is Marriott Courtyard. But that, too, is delayed. Srishti Housing Development Co Ltd has finally begun construction on a 400-room hotel after a prolonged delay. “Our hotel will come up by 2011,” said company chairman Hemant Kanoria.
Salarpuria Properties and Ambuja Realty are the only projects that are close to being on track in Rajarhat. The former is setting up a four-star property, while the latter is nearing completion on the five-star project at City Centre 2. “We are negotiating with an international hotel chain to manage the property. The hotel will open in December or January,” said Ambuja Realty chief Harsh Neotia. Further down at the airport, the DS Group had planned two hotels a star and a budget property with 150 rooms each. Though the demolition of Hotel Airport Ashok is underway to make way for the new hotels, the regional head is not willing to make any commitments. “Clearances are being processed. No plan has been frozen yet,” project chief Tapas Biswas said.
Along Kona Expressway, another hotel project by Bengal Unitech Universal group is in freeze mode. But further south along the Hooghly, architects and planners are poring over the drawing board to finalize the Crown Plaza property at Batanagar. The only other projects untouched by the meltdown are those in the heart of the city. Both ITC Fortune on Loudon Street and Park Hyatt on Russel Street are set to open on schedule. Bipin Vora, chairman of the SPS Group that owns the property, said the hotel would be ready by Diwali. Sureka thinks the other projects would be revived once the economy looks up. “Everyone will take a fresh call in six-eight months,” he said.
Ref:http://www.indianrealtynews.com/real-estate-india/kolkata/situation-looks-grim-for-kolkata-hotel-projects.html