Budget Trying to Meet Scarcity of Hotel Rooms

March 1, 2007	(Be the first to rate this story!)  Loading ...
Print This Story   Email This Story Subscribe Newsletter

The new budget by finance minister hardly seemed to be the flavor for the hotel industry and travel and tourism sector, which is discontented with the decision to grant tax holiday only to two, three, and four star hotels as well as convention centers that have a seating capacity of not less than 3,000.

The minister has also proposed an increase in the provision for developing tourist infrastructure from Rs 423 crore in 2006-07 to Rs 520 crore in 2007-08.

The budget permits pass through status to venture capital funds that make investments in hotel cum convention centres of a particular size and sketch. This is done to promote business tourism in industry.

There is a serious scarcity of good and comfortable hotel rooms, and demand far outstrips supply. Around 20,000 more hotel rooms are required for the Commonwealth Games, to be held in New Delhi in October 2010.

Indian hospitality sector is yearning to have the treatment on a par with other infrastructure sectors, including roads, ports, and telecommunications. Moreover, the industry has put forward the demand for an increased capital outlay as the land prices are going through the roof.

Granting tax holiday to just two, three, and four star hotels in the NCR has also become a bone of contention for the hotel industry and travel and tourism sector, who wants the benefits to extend to five star hotels as well. Adding fuel to the fire is FM’s decision to limit the tax holiday only to do the framework of the 2010 Commonwealth Games.

The only exception remains the infrastructure fund that has brought smile on the face of the hotel industry, as it believes it can generate long term resources from the new funds. The tourism sector finds the amount to be inadequate, given the restrictions faced by tourism infrastructure in the country.

News Published Under:   Real Estate India |

Comments