Drive down Rajiv Gandhi Salai (Old Mahabalipuram Road) or East Coast Road, and you can’t help but notice the number of new hotels springing up.

Big ones, small hotels, service apartments – you name it and the roads have them, catering to every kind of traveller that comes to the city.

Despite hotel room rates slipping in the city in response to low demand, there seems to be no stopping new constructions. The IT and other companies dotting the corridor seem to be fuelling demand here.

A source in the IT industry explained that there are around 300 IT and IT related companies on the road and the large ones would get around 1,000 visitors each every year. “Hotels with whom we have tie-ups usually give us good rates. Our guests vary: they are vendors, suppliers and even trainers. People opt for hotels since company guest houses will not have facilities including spas, gyms, swimming pools and room service,” he said.

At least six new properties are coming up on OMR and three on ECR. R. Mathiraj, deputy general manager (projects), Accor Group, said their 132-room business-class hotel, Formula 1, on OMR is expected to be ready for opening in a couple of months. “The IT companies and 20-odd colleges are attractions since they get a large number of guests,” he said.

Ibis, an international hotel company, opened its establishment, Hotel Ibis Chennai Sipcot, in Egattur, OMR last October. According to a hotel official, the 176-room hotel has been averaging a 70 per cent occupancy rate so far. “We have corporate tie-ups and focus primarily on business travellers,” he said.

Service apartments too are vying for a piece of the pie on OMR. About three months ago, Siesta Prim Villa, a set of service apartments, came up in Egattur near SIPCOT. “Many companies who hire new recruits have them stay for two or three weeks with us when they first come to the city,” said M. Jayakar, assistant manager, customer service.

However, existing players say that though the number of rooms has gone up from 400 to around 1,000, business has not developed accordingly. “Earlier, automobile companies from the Oragadam-Sriperumbur belt used to take rooms here. But now, they have moved to GST road since they are able to save on travel time. The brand value and the experience the hotel offers bring back customers. If the IT industry grows further, things will look up,” said Krishnakumar Menon, General Manager, Hotel Aloft, Sholinganallur.

The East Coast Road however, caters to a different clientele and is synonymous with leisure. It attracts those who want to soak in the area’s atmosphere and the facilities at resorts and hotels with their spas and swimming pools. It is also becoming a wedding destination for those keen on get married by the sea.

R. Vicky, who works in a BPO, said that he goes along with his friends to the ECR on a regular basis. “We prefer to hang out on the ECR rather than go to Pondy. We like the beach and the atmosphere is very relaxing since we are away from the city and work. We spend close to Rs. 5,000-Rs. 6000 for two people for the entire weekend,” he said.

J. Sethuraman, managing director, Grande Bay Resort and Spa, Mamallapuram, said that corporates find the ambience, especially the quiet and large spaces, perfect for their annual events and training programmes. “They prefer weekdays and many hotels bank on that crowd. During the weekends, you can find only those coming over for leisure. Hotel occupancy rates are around 50-60 per cent. But with more competition coming up, it remains to be seen how things will shape up,” he said.

But is there enough demand to meet all of this supply? T. Natarajan, secretary, South India Hotels and Restaurants Association does not think so. “Everybody is hoping for an economic turnaround and expecting the OMR and ECR to be at the heart of it. Others have committed to hotels and have to build. But there is a definite oversupply of rooms in these areas, as there is in the rest of the city,” he said.