‘Tier II, III growth relies on infra’

Pradeep Shetty, President, FHRAI, says tier-II & III cities of India hold the potential to become big tourist attractions, provided the union and state governments work in tandem with the tourism and hospitality industry. He stresses on infrastructure development, saying that it plays key role in the pursuit of tourism development.

Nisha Verma

Calling the recent convention of South India Hotel and Restaurant Association of India (SIHRA) a forum for hoteliers to come together, Pradeep Shetty, President, FHRAI, underlined that the event was held in Visakhapatnam for the first time. “Bringing the conventions to such locations ensures that there is a focus of development of tourism there. It gives an opportunity to players from other parts of South India to come and look at one region. Besides this, the theme was India Growth Story, under which various pertinent issues like talent acquisition and immediate challenges facing the industry were discussed. All this brainstorming will help us in or representation to the governments at the state level as well as the central level,” he claimed.

Tiered cities and skilling

Elaborating on the challenges faced by the industry in the Southern region, he said, “There has been a lot of growth in the tier II & III cities, which is evident for a couple of years now. In fact, post-pandemic, there has been a phenomenal rise in domestic tourism, and that has helped the industry to bounce back after the pandemic.

“Having said that, it is a critical point. There requires to be a special focus on development of tourism in these places because many of them have the potential but lack infrastructure. However, there has been a renewed focus of the central government on development in all tier II & III cities. We look at that as an opportunity and hence we are flagging the issue about financial availability or financial credit assistance, as well as how industry should be treated as one of the core infrastructure elements. Within the larger scheme of infrastructure development, hospitality should be a major infrastructure, for which long term lending is a critical part, along with good interest rates. All this is being elusive to this industry. Hence, we want to bring that threshold from `100 crore back down to `10 crores for tourism project to be planned as an infrastructure project. Resolving these issues would help the idea of developing more tier II cities as tourist destinations,” he asserted.

Govt collaborations

Reiterating that the central government has increased focus on domestic travel, Shetty shared, “There is a focus on developing more tourist destinations. In the last Parliamentary Committee meeting, we saw that the government was interested in developing greenfield tourism projects, where a particular viable location would be selected and a complete city would be created akin to Kevadia in Gujarat. Our role is to reach out to both the Union and state governments to see that necessary focus is given to issues that will help in building tourism and better infrastructure. That is our job. We face issues about coordination between the Union and state governments with tourism, largely being a state subject. However, I see a renewed focus at the central level, and at the state level as well. More state governments are waking up to the fact that there lies a huge potential. In addition, an enabling environment needs to be created and the efforts from our side will continue in bridging this gap—bringing the governments closer and identifying the issues, which will help the industry and the growth of tourism.”

FHRAI Initiatives

Encapsulating major issues for FHRAI this year, he informed, “We will focus on various challenges that plagues the industry. One of them being the copyright issue where there are certain irritants about multiple societies claiming money. There is also an issue about our guests being made to pay for the weddings that happen, which are fully exempted. We are presently working with the government and consultation process is underway. We are looking for some resolution in this regard.”

Shetty said there are issues with the GST, which need to be looked at. “There are issues with rate and the `7,500 slab that has been put, above which you get into the 18 per cent bracket.



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