The services sector, which is the major contributor to Gross State Domestic Product (GSDP) of Andhra Pradesh, and Hyderabad in particular, has been impacted significantly due to the ongoing agitation for separate statehood of Telangana.
Sectors such as hospitality, tourism, realty and retail have taken a beating. As things turned out, the hospitality sector has witnessed lower occupancy levels ranging from about 10-15 per cent. This was mainly due to cancellation of conferences and meetings, which Hyderabad is gradually getting to be known for due to better connectively and facilities, according to Mr P.K. Dutt, Secretary General of HRAAP.
Hospitality sector
Hotels and Restaurants Association of Andhra Pradesh (HRAAP) says, the hospitality sector is worried because the uncertainly is a bigger problem than the agitation itself. A decision either way and a permanent solutions will ensure good business for Hyderabad.
According to a senior official of the Tourism Department, the ongoing agitation has impacted the overall number of visitors in the region. While two of the tourism properties at Basara and Bhadrachalam have not seen much impact, some of the long distance tourism buses have seen lower occupancy levels. People travelling to destinations such as Shirdi are cautious due to agitations and road blocks.
“The overall tourist flow to Hyderabad is about 5-7 per cent of the total State's visitors. This has seen some decrease though the immediate data has to be aggregated. During the festive season too there is general fall in number of tourist visitors. This, coinciding with agitation, has meant lower number of visitors,” he explained.
“The realty sector has taken enough pressures due to general economic slowdown, followed by real estate prices dipping by about 30 per cent and later the uncertainty due to this prolonged agitation. The prices too have bottomed out without any further downside potential. In fact, the prices have recovered in most cities barring Hyderabad,” according to Mr Prem Kumar, President of Andhra Pradesh Real Estate Developers Association.
Realty industry
Most people are of the opinion that the fundamentals of Hyderabad are strong and these things would not deter any buyer from finalising a decision. Another builder says that for business to be buoyant there needs to be some speculative purchase, which is missing at present.
Just when things settle down and buyers get to purchase mode, any uncertainty due to the agitation puts them off from taking a final decision. Only locals are buying, those who have choice of other cities tend to opt out, according to APREDA.