Propel hotel infrastructure

There is a need to add 180,000 hotel rooms across categories if India plans to host 20 million foreign tourists in the next 10 years, points out Vivek Nair, CMD, The Leela Palace, Hotels and Resorts.

TT Bureau

According to Vivek Nair, the tourism and hospitality industry has worked very hard to increase the number of foreign tourist arrivals (FTAs) into the country, crossing the 10 million mark. However, a lot needs to be done to improve infrastructure. He says, “We want to reach the 20 million mark for FTAs in India in the next 10 years, which is an impossible task. This is because currently, we only have 120,000 guest rooms and we need to add another 180,000 more. If one looks at the capital expenditure, it takes about `1 crore to make one room of any category. Thus, we are talking about an investment of over `180,000 crore, which is too big an amount to be deployed in the next 10 years.”

“When tourists compare the cost of visiting Indian destinations, they prefer to visit neighbouring countries as they charge taxes one third compared to India”

Further, Nair explains that the hospitality industry has been taking the beating from economic policy changes in the past year. “I personally took up the matter of hotels being brought under the infrastructure lending list like airports, ports etc, so we could get long term loans from the banks. However, because of the challenges in the system, none of the hotels got any benefit.  Many hotels are in fact becoming Non-Performing Assets (NPAs).”

Commenting on the implementation of GST and its impact on the hospitality business, Nair feels that the tax slabs have caused many hotels to lose business. He says, “Charging 28 per cent GST on hotels with room tariffs above `7500 is another way of losing out on the competitiveness of the country as a tourist destination. When the foreign tourists or the domestic travellers calculate and compare the cost of visiting Indian destinations, they naturally prefer to visit neighbouring countries since they charge taxes one third compared to India.” The hospitality industry has approached the Finance Minister and has been given hopes that the taxes shall be rationalised to 18 per cent.

Synergising tourism & aviation

To propel growth of tourism and civil aviation sectors, the hospitality industry recently conducted a felicitation ceremony, welcoming the new Civil Aviation Minister, Suresh Prabhu. The ceremony, hosted at The Leela Palace New Delhi, saw in attendance the who’s who of the travel, commerce and hospitality industry. Bharat Malkhani, MD, Max Aerospace & Aviation, in a detailed presentation brought to attention the various challenges plaguing the growth of the aviation industry in India and proposed plausible way forward on behalf of the sector.

Welcoming the new minister, Nair says, “Tourism and civil aviation have to go in tandem for growth. We heartily welcome Suresh Prabhu who is known for his perspicacious thinking on every matter. The Tourism Minister, K J Alphons is also known for his dynamism and I feel this is the right time for both the ministries to work in synergy to achieve the goals that are set upon us.”