REGION OVERVIEW
- Ooty or Udhagamandalam has a rich colonial history. Founded by John Sullivan in the year 1819 as a Summer Retreat for the Britishers, Ooty soon was frequented by Maharajas, and the Nizams along with the Britishers.
- Establishment of Wellington Gymkhana club at Coonoor in 1873 and completion of the Nilgiri Mountain Railway in 1908 led to developments towards Coonoor. The region Ooty – Coonoor, were known for the tea estates, prominent boarding schools - The Lawerence School, The Good Shepherd International School to name a few.
- Post independence between 1975 – 1990s, Ooty was amongst the most preferred hill stations in the South of India by domestic tourists. Doddabetta peak (2,637 meters) is the third highest peak of South India.
- Today, the region apart from being preferred by tourists is also amongst one of the most preferred destinations as Holiday home in South India mainly due conducive weather during summer and availability of the required infrastructure. Developments of holiday homes is witnessed largely across Coonoor and Kotagiri – Aravenu region.
- For this blog, developments across Ooty, Coonoor, and Kotagiri are studied.
Figure 1: Map of Nilgiris District highlighting Ooty – Coonoor & Kotagiri
TOURISM OVERVIEW
- Ooty records an annual tourist footfall in the range of 1.25 – 1.50 crores . Average duration of stay in Ooty is estimated around 2.5 days. The region continues to experience seasonal fluctuations with high tourist footfall occurring in summer months from March until June, followed by winter months of November until January.
- Close to 95 per cent of the visitors are domestic tourists. The region has varied tourist profile – leisure tourists comprise of 75 to 80 per cent of the total demand. The demand for the short stay is driven by leisure travellers from Bengaluru, Coimbatore, Tirupur, Palakkad, and rest of India. Due to lack of availability of limited hotels with over 100 rooms, the location is preferred for small corporate events (up to 25 - 75 people) and pre-wedding celebrations – mainly from the areas around Coimbatore, Mysore and Bengaluru. The region witnesses travel by families of the students studying in the boarding schools; the usual duration of stay ranges between 5 to 15 days annually.
- The region on account of its weather, is one of the preferred locations as a second home or a holiday home destination. Coonoor is preferred as a holiday home destination on account of moderate climate and available social infrastructure. The region has witnessed emergence of vacation rental properties largely the Colonial British bungalows and contemporary bungalows within tea estates.
HOSPITALITY OVERVIEW
- Ooty currently has a limited supply of hotels, 32 per cent of the total inventory is managed by reputed operators. Regional and local operators continue to dominate the supply however the national and international operators cater to the upscale, upper upscale and luxury segments.
- Most of the operational hotels in the region are heritage or colonial buildings remodelled to a resort / hotel. For instance, King’s Cliff (9 rooms), Taj Savoy (40 rooms), WelcomHeritage Fern Hills Royal Palace (19 rooms), and Club Mahindra Derby Greens (91 room old Dasprakash Hotel). Sterling Holidays across two properties have a total of 324 operational keys in the region. Other prominent operational hotels include Fortune (67 rooms), Hotel Sinclairs (88 rooms), Accord Highland (57 keys). Mango Hill Hotel (90 rooms) and Ayatana (30 rooms) are the recently operational resort properties in the region. Radisson Individuals Retreats, a planned resort is the brand extension by Radisson Group in the region (in proximity to Coonoor).
- The region on account of limited resort inventory has led to conversion of colonial bungalows or the estate manager’s bungalows within the tea estates in to vacation rental home properties. These developments cater to group leisure demand – largely traveling from Bengaluru and Coimbatore.
- Completion of Bengaluru – Mysore expressway in the year 2023 has led to reduction in travel time to Ooty from 10 hours to now 6 hours. Expansion of the Coimbatore airport, road improvements near Mettupalayam, and tourist infrastructure improvements on account of the Ooty being part of the Swadesh Darshan scheme are likely to provide a thrust to tourism in the region. However, due to development restrictions by the Hill Area Conservation Authority (HACA), the region is expected to witness limited newer developments in the coming 3 to 5 years.
OUTLOOK
- Limited resort properties and significant tourist footfall offers resort development opportunities in the region. Development in the region is expected to be sparse – with areas around Coonoor, having the highest potential followed by Aravenu and Kotagiri towards North-east of the region. Locations of Masinagudi and Gundlupet towards North-west are also likely to be preferred for resort developments.
- The region on account of significant presence of holiday home or second home projects, offers an opportunity to develop a master planned community – a resort along with serviced villas or vacation rental homes. Landowners in the region especially in proximity to Ooty and Coonoor are likely to evaluate partnership structures for resort development.
- Developers are also likely to evaluate redevelopment or restoration opportunities of old heritage properties while operators are likely to evaluate re-branding opportunities.
- Though a preferred tourist destination, Ooty as a region is likely to face competition from emerging tourist locations of Coorg, Chikmagalur and Sakleshpur in Karnataka, and Araku Valley in Andhra Pradesh. Government initiatives and improvement of connectivity shall be crucial for further growth of real estate developments at Ooty.
About Hospitality Real Estate Services at Meraqi:
Hospitality Real Estate investment involves strategic and analytical decision-making which helps in determining. Our team advises the owners and investors, by evaluating the market, regulation, and financial feasibility of a hospitality product, identifying the appropriate development mix, property valuation, operator selection, and contract negotiations. We also assist the owners, developers and investors in invest or divest the property, operator tie-up and investment structuring.
