Jagmohan Lambasts Industry’s Failure To Invest In New Destinations

Anindita Chattopadhyay - New Delhi

The government, always derided for not doing enough to promote tourism in the country, for once has gone on the offensive. Recently, Jagmohan, union minister for tourism and culture, in a speech, pulled up the hotel industry for not utilising the excellent business opportunities to set up accommodation services in the tourist hubs being developed by the government.

"Though we are creating tourist hubs, it is unfortunate that hoteliers are not showing interest in constructing hotels at these new destinations. We are prepared to extend all possible support to them if they express interest. At present, various concessions have been made available such as land at reduced rates. The hotel industry should come forward to invest,” said Jagmohan, while speaking at a function in the Capital last week to announce a day-tour package to Kurukshetra, a newly-developed tourism destination.

In reply to the minister’s dressing down, the hospitality industry, which has shown resilience to weather frequent rough patches, says it is in no situation to invest in projects which are financially unviable.

Commented Mandeep Singh Lamba, president, Fortune Hotels, “The industry is going through a rough patch. So, for projects with long gestation periods, financial viability is an obvious consideration. Developing a tourist attraction is not enough till tourists are really going there.”

Sunil Mathur, COO, Choice Hospitality (India), agreed. He said, “Any business proposition has to be viable. If the right balance of demand and supply is absent, how can an operator recover his return on investment?”

The industry is also wary of the minister’s promise to extend `every possible’ assistance.

“In reality, we still have to get between 30-40 clearances from various departments to start a simple hotel project, so forget about Single Window Clearance. Evaluation of land is always a bottleneck. The government should make the proposition lucrative enough to be an attractive investment,” remarked Lamba.

Mathur goes a step further to suggest that local players should be approached first, rather than the big chains. “Let the state government give enough incentive to attract the local players. Then big names can follow when there is enough demand,” he says.

However, Lalit Suri, member of Parliament and chairman Bharat Hotels, promises all support. “I can speak for myself. Bharat Hotels will definitely come up with small properties around some of the hubs being developed provided we get all assistance like land at nominal rates and Single Window Clearance for the projects because different states have different regulations. As president of the Hotel Association of India, I will request our members to actively consider such investments,” he said.