Tuesday, February 16, 2010

Hotel Rooms missing deadline, need 4 more months to complete

Despite the claims that preparations for the Commonwealth Games are on course, nearly 30% of hotel rooms are unlikely to be completed by the deadline of March 31.

Land owning agencies including Delhi Development Authority (DDA) which needs to build 1,836 rooms have now sought a reprieve of four months.

To make matters worse, DDA has also asked that the deadline for its flats being refurbished by India Tourism Development Corporation (ITDC) be extended from March-end to May while only an estimated 50% bed and breakfast (B&B) establishments have come up so far.

Tourism secretary Sujit Banerjee said, ‘‘The agencies have told us that of the 10,540 rooms, 3,233 rooms can only be completed by July.”

Pushed to the wall, the ministry had no choice but to agree for an extension in a recent review held by the ministry.

The government is treading a fine line in meeting its target of 40,000 rooms for Games’ visitors. The tourism ministry had estimated a demand for 40,000 rooms of which 10,161 rooms are already available in Delhi and NCR. Officials had planned to construct at least 10,000 additional hotel rooms.

But a combination of reasons, including the economic slump and the multiple clearances, has put a spanner in the works.

The progress made by land owning agencies like DDA in construction of new hotel rooms has been rather modest. They have completed only 403 of the estimated 2,239 rooms that were expected. Haryana is a tad better with 5,765 rooms completed out of the total 6,766 rooms expected from it.

Uttar Pradesh has the best track record so far, completing 1,139 rooms of the total of 1,535 rooms expected.

The hospitality industry is considered a high risk investment and there is a relatively long period before a star rated hotel manages to break even. With agencies like DMRC, DIAL and railways unable to construct hotels in time for the Games, the government is now banking heavily on the bed and breakfast establishments (3,000), guesthouses (11,912 rooms) and 5,500 DDA flats in Vasant Kunj and Jasola.

The tourism ministry has also written to the finance ministry asking for tax benefits — introduced in the 2008 budget for investments in hotels — to extend the deadline from March to July-end.

Another cause for concern is the B&Bs that have totaled about 1,610 instead of the target of 3,000.

Sources in the ministry said that unless Delhi government hastened the progress on facilitating more B&Bs, the Games preparation could be in deep trouble.