Diminishing returns see star hoteliers opt out

They came in droves to Chennai to establish themselves in a booming hospitality market two decades ago. But, years later, well-known brands in the metro are struggling to sustain their operations, after being hit hard by economic downturn or natural disasters. Call it de-risk by force or by choice, many leading hoteliers are either scouting for investors or looking to sell off their properties.
Diminishing returns see star hoteliers opt out
A file photo of a five-star property in Chennai

Chennai

Asiana Hotels and Resorts, The Gateway Hotels and Resorts, managed by the Taj Group, Leela Palace, The Legends and Thulashi Park are believed to be evaluating these routes to tide over the rough patch. Multiple sources from the hospitality sector have confirmed these developments. 
Efforts to obtain an official confirmation proved futile. Those who chose to respond steered clear of market information. “We are only operators and not owners of the property, and have no comments,” said the Taj spokesperson, when probed about the sale of the Gateway Hotels and Resorts. 
Early entrants like the Residency Group or the GRT group have diversified from their core businesses. After creating an identity for their hospitality ventures, many find it more viable to operate on a shared (partnership) management model. 
In Madurai, for instance, the wellknown Pandian Hotel, managed by the Taj group for close to a decade, switched management to Fortune. Likewise, the Sarovar Hotels and others with their international connections, were instrumental in bringing in Marriott and the Starwood into Chennai.
“Proprietors of hotels who lack managerial acumen find it better to engage trained professionals as it’s a high ticket investment,” is the common refrain from hospitality players, who have been observing the industry for years.

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