‘Hospitality should be given as much priority as IT’

T Nataraajan, CEO of GRT Hotels & Resorts, talks about trends and challenges in the Tamil Nadu hospitality industry, government support and ideas for development. By Sangeetha Neeraja

T Nataraajan

What do you think about the growth trends in hospitality in the southern region, especially Tamil Nadu?

The market is vibrant with high demand. As per CII reports, there is going to be a demand of 4,000 hotel rooms by 2010. Meeting this is going to be an uphill task. Thus, the challenge for the hotel industry is to cope with the current pace. Except for a few new properties like Hilton, JW Marriott and Leela, there is no capacity for expansion in the already-present properties because of FSI norms.

The new properties will be located on the outskirts of Old Mahabalipuram Road. There is huge requirement for the centrally-located properties, but right now nothing much is happening in the heart of the city. There are, however, developments happening in the tier II cities like Coimbatore, Salem, Madurai, where hectic IT developments are taking place.

How supportive is the government in terms of developing the hospitality industry?

The tourism industry is supportive in terms of actually listening to our grievances. There should be sensitivity towards the potential the tourism industry has. It must to be given as much priority as the IT industry. There are certain core issues, which, if addressed, will definitely lead to tangible growth of the industry.

What are these core issues?

Some of our neighbouring states are adopting the practice of giving long lease on plots of land to the hotel industry. The hotelier's concern is that if they are going to invest a huge amount of revenue on just acquiring a property and then go for construction, the outcome would not be a very viable proposition in terms of returns. If the government comes up with any proposal for this, it will be greatly welcomed by the industry.

The second grievance is the liquor-related regulations that were framed during the days of the Raj with no revisions made thereafter. The trend is the migration of people to states with relaxed regulations, resulting in a loss of revenue to Tamil Nadu.

Thirdly, the FSI rules are stringently followed in the hospitality industry. To keep up with the ever-increasing demand, the industry is struggling. On the other hand, these rules have been relaxed in the IT industry. Once these core issues are addressed, the outcome will definitely give a boost to the hospitality industry in Tamil Nadu.

Are there any internal challenges?

There is a huge manpower requirement in the hotel industry, especially with the IT/ITeS boom. The industry has to wake up to that fact and come up with innovative ways to motivate new talent, while working on attrition rates.