The Residency group of hotels is all set to strengthen its presence in the South by expanding its chain. Besides the two hotels that The Residency, promoted by the Appaswamy group now operates in Chennai and one each at Coimbatore, Bangalore and Karur, plans are afoot to establish hotels in Puducherry, Madurai, Mysore and Chennai.

The proposed project at Chennai is expected to come up along the IT highway. Though this would not be immediate, the launch of this project would make it the group's third hotel in Chennai. The group already operates two hotels at T Nagar - The Residency, Chennai and its second property – a four-star category hotel – The Residency Towers.

The Managing Director of the Group, Mr Ravi Appaswamy, told Business Line that the work on the Puducherry project was on, while land had been procured for establishing a hotel each in Madurai, Mysore and Chennai. While work on the group's venture at Madurai and Mysore would commence before the close of the year, the Chennai project, which is expected to come up in a 4.5 acre ground on the IT highway would not be immediate, he said.

At Madurai, the hotel is expected to come up closer to the airport on a seven-acre ground. “We have given the work to a Singapore architect. The plan is on the drawing board stage. We intend to have a convention centre as well and take the city to the next level. The Mysore project would have 100 rooms and in downtown area. We will target tour groups and business people as there is a lot happening in terms of IT in Mysore.”

Allocation

The budget allocation towards the Mysore and Madurai projects have been estimated at around Rs 125-150 crore. “It will be from our internal accruals,” he said, adding “it will take about three years to operationalise these hotels. We expect to commence the work before the end of this year.”

Mr Appasamy was in the city to oversee the renovation of the Coimbatore project. Asked if he was looking to foray in to Hyderabad and Bangalore, he said, “We are not looking at establishing our chain in Hyderabad for now because of the Telangana issue; as for Bangalore, we are looking at a right location.”

(The Bangalore property – The Richmond Hotel – is managed by SAS Hotels).

Reverting to the Coimbatore project, he said, “We are preparing to offer our customers a new experience, be it dining or staying. Today, the hospitality industry here has matured, grown four-fold; we are not looking at establishing a second project here.”

Asked if he sought to refurbish the interiors because of the competition following entry of a number of business class hotels here, he said, “The normal turnaround time for renovation in the hotel industry ranges between 8 and 10 years; we have taken up renovation of gadgets such as the air-conditioning plant, lift and other engineering equipments in the first phase. This would result in energy saving and thereby cost, as also ensure our commitment to the environment.”

The group has installed a windmill, which caters to the energy requirement of its five hotels, he said.

Renovation of the rooms was in progress and every three months, the refurbished rooms would be rolled out, he said. “We invest on maintaining the room, not just creating the facility and stopping there. Every three months, we refurbish the upholstery, polish and make the required changes. Now, we have taken up 100 per cent replacement on an estimated outlay of Rs 25-30 crore.”

Differential tariff

The group has introduced differential tariff such as corporate tariff, best available rate and flexible pricing. “This dynamic pricing is basically to handle the supply-demand gap and we also offer 24-hour check-out facility unlike most others that go by the 12 o'clock check-in rate,” he said, adding “like the airline industry, the hospitality sector is also going through a revenue management situation.”

Pricing of various offerings such as availing cab service, pick-up and drop, complimentary breakfast etc, which remained fixed in the past was made more flexible now, he added. “The customer can choose the services that he/she wishes to avail from the bouquet of offerings and pay only for the services availed.”

To a query on the challenge that the hospitality sector faced at this juncture, Mr Appaswamy said, “Attrition at the threshold level is still an issue.”

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