The Chandigarh airport has witnessed an increase of 29 percent in the arrival of passengers in last four years, according to North Indian estate report of the Federation of Indian Chambers of Commerce and Industry (FCCI) and Ernst & Young (EY).
According to data, the number has increased from 6.6 lakh passengers in 2010-11 per annum to 10.6 lakh in financial year 2013-14.
As many as 8.1 lakh passengers arrived at the airport in 2011-12. The number of passengers increased to 8.9 lakh in 2012-13. The increase in the traffic arrival at the airport is attributed to the increase in the number of flights operated by the existing airlines and development of large scale information and technology (IT) infrastructure in the tri-city.
The increase in the arrivals by air has also led to city hotels witnessing increase in the demand for meeting incentive conference exhibition (MICE) segment and corporate travellers that accounts for 60 percent to 70 percent of the total demand. As per the report, MICE segment is also expected to grow in the tri-city.
Slump in hospitality market
The report reveals that the slow progress of projects such as Rajiv Gandhi Chandigarh Technology Park (RGCTP) in Chandigarh due to land acquisition issues has led to a situation of oversupply. Hotels are focusing on improving their efficiency to sustain their operation as they wait for the demand to pick up.
Figures reveal that in 2013, five-star hotels in the city were operating with average occupancy rate of 55-60 percent, while four-star hotels saw an average occupancy of 65-70 percent. Three-star hotels witnessed the highest occupancy in the range of 75-80 percent.
At present, there are as many as four five-star hotels - Taj, JW Marriot, Mountview and The Lalit - in the city.
The hospitality sector in SAS Nagar has not gained momentum due to lack of operational commercial parks in the city.
Malls preferred choice over other commercial areas
Since rentals of retail outlets in the city such as Sector 17 are very high besides a limited availability of high-quality space, retailers prefer malls to commercial area in different sectors. The average rental of retail outlets in the city range from Rs 300 to Rs 600 per square foot per month, mall rental in Chandigarh ranges from Rs 80 to Rs 100 per square foot per month.
The report claims that the average rental value in malls has been witnessing a downward trend in the last two years due to increase in numbers of malls in the city.