Hostels and Paying Guest (PG) accommodations across Chennai, which were thriving business until the outbreak of COVID-19, are now witnessing huge losses and many are on the verge of closing down.
With IT firms and other industries giving ‘work from home’ options to their employees those staying in women and men’s hostels and PGs have vacated their rooms. Many hostels in Chennai, which have a capacity of accommodating 100-150 people are now running with a few dozen residents. A few hostels have put up messages on various hostel WhatsApp groups, indicating that they are up for sale.
“Most of the residents from my hostel have moved back to their hometowns. Some women have called and informed me that they have been given the work from home option, and would not be coming until December,” said K.S. Manoharan, secretary, Chennai Hostel Owners Welfare Association, who is in the process of closing one of his branches in Saidapet. “Many hostels are running into huge losses,” he said.
In Chennai most hostels buildings are either rented or taken on a two-year lease. Paying Guest accommodations are run in apartments or a small rented space. Ballpark estimates show that the city has over 4,000 hostels and PG accommodations. On an average, a person residing in a hostel is charged anywhere between ₹5,000 (four per room) to ₹14,000 (two per room) per month, depending on the place where the hostel is situated. In some places, the charges go beyond ₹14,000 for a single room with food.
“Many hostels are not able to pay the rent to the building owners. Building owners are putting pressure on those running hostels to pay the rent or wind up and hand over the keys. Though many residents have left their luggage and belongings here, they are refusing to pay rent. They are asking us why they should pay when they are not staying there,” Mr. Manoharan said.
Vanitha Karthikeyan, who runs Harini Homes Ladies Hostel in Ekkaduthangal, Guindy, said that women who are on her hostel rolls are citing reasons such as salary cuts, lay-offs and are asking for a fee waiver and some are refusing to pay. “We have four branches and of these, three branches are kept under lock and key. We can’t even close the branches because all residents have left their belongings. We cannot enter their rooms when they are not around. So we need to wait and watch,” she said. “My branches are rented-out premises which cost me anywhere between ₹1 lakh to ₹1.5 lakh per month,” she added. Of the 300 women who are on the hostel rolls, only 11 are in the hostel now.
The owner of a hostel in T. Nagar said that of the 30 women, only 9 are in the hostel now while the others have left for their hometowns. “I pay ₹1.5 lakh as rent per month and apart from that I have other overhead costs like electricity, food, salaries for cooks, cleaners and security staff. This is my only source of income and it is difficult for me to run the business,” he said on condition of anonymity. He added, “I can’t shut this hostel as I have made huge investments in building it.”
Owners of two big hostels in the city have indicated that they will be closing down a few of their branches in the coming days. In the last fifteen years, with the IT and industrial boom several people ventured into the hostel business in Chennai. In the last ten years several hostels mushroomed in Ambattur, Sholinganallur, Navalur and Guindy among other areas.
Hostels in Chennai’s IT corridor (Old Mahabalipuram Road), now wear a deserted look and those who were operating them have only 5-10 residents, who have returned to the city after few companies re-started businesses. Nageswara Rao, Secretary, South Chennai Paying Guest and Hostel Owners Association, said that over 50% of the hostels in this zone which house women who work in start-ups and IT firms are running empty but owners are struggling to wind up businesses as residents have kept their personal belongings. Mr. Rao, who has closed one of his hostels in this belt, said that residents are calling and saying they can’t pay rent. “They don’t understand that we are safeguarding their belongings here. Some of them have threatened to file a complaint if we asked for rent,” he lamented.
Many hostel and PG owners said that residents have misunderstood what the State government has said. Considering the difficulties faced by tenants in paying monthly rent due to the COVID-19 situation, the Chief Minister had requested house owners to get the rent for March and April after two months. Residents of hostels have misunderstood this statement and are claiming that they need not pay hostel fees for three months, Mr. Rao said.