With the Government's unflagging hard work and incredible efforts from generation to generation, the country's hospitality sector - travel and tourism industry has turned into a new phase, which has resulted in India being recognized by the entire world as an exciting place to visit.
'The Readers Travel Awards 2006', conducted by Conde Nast Traveller has recently placed India at number four among the world's must-see countries, up from number nine in 2003. This has also furthered its impression as a leisure destination.
India's hospitality sector has grown in an unprecedented manner during the last few years if not decades, and has become one of the fastest and leading global players. This has been the result of a strong performance of the corporate sector in the country and largely a sense of sanguinity with regard to economy.
And why not? This sector enjoys offering the country a promising and largest number of employees in both the organized and the unorganized sector. Of this, the travel and tourism industry accounts for one of every nine job opportunities created in the country, aggregating 20 million. According to industry analysis, globalisation and liberalisation of every single industry/units and the recent introduction of 'Look East Policy' and 'Open Skies Policy' by the Government of India has brought and will keep bringing a new dimension and impetus to the hospitality sector.
With 4.4 millions tourists' arrival in the country last year, the industry has been seeing unprecedented growth with an average of 15 per cent every year. This figure is expected to grow further in the coming years. The Capital has also witnessed 32.1 per cent growth in tourists' arrival in the last year. The cities of Mumbai, Chennai and Kolkata have shown a growth of 25.0%, 10.0% and 2.9% respectively.
Even though India has witnessed a great changing and doubling of foreign exchange earning (6.70) in the industry, some hoteliers and experts of the industry think otherwise. Says Mr. Rajindera Kumar, director of The Ambassador Hotel, in New Delhi and President of 'The Hotel & Restaurant Association of Northern India' (HRANI), "Although we are talking more of the growth and boom in the hospitality industry, there is another side that one has to see."
He is of the view that the Government's imposition of different taxes and irrational treatment of low star hotels are of great concern. He feels that the Government should come out with a strong suggestion and open agenda that should be something that the hotelier can rely upon. The high rocketing price of taxations has unnecessarily caused/created great worry to the tourists and travellers, which made them ultimately opt for other destinations. "The government should try to nationalize and make its taxation norms more convenient," he said.
Mr. Kumar also explains that the present auction[ing] of hotel sites at an unreasonable price by the Delhi Development Authority (DDA) has also created a lot of hurdles, in which there is no justification of higher prices. The government should stop it and instead should regulate more to the low star hotel giving more rooms than the present available hotel rooms of around 15,000, which is expected to reach 25,000 -30,000 in 2010 in the city. Talking about the Government's proposal of 'paying guest house' project, Kumar describes, "It should clearly justify the norms to be given to the owner and for how long."
Agreeing with the words of Kumar, Rajesh Mishra, President of Federation of Hotel and Restaurant Associations of India (FHRAI), says that higher taxations and differences in taxes charged by different states and the lack of proper infrastructure is a grave matter of concern for the growth of the industry. He demands that infrastructure building should be given priority under Sec. 80 IA of Indian Income Tax, 1961 by the Government.
"VAT, F&B, Entertainment taxes should be cut down in minimum levels that would provide some kind of relief to the hoteliers as well as tourists," he avers.
Mr. Mishra also insists that the Government should make a uniform policy and that the legislative should be more sympathetic to the industry, without which the foreign tourists and travellers will be off to cheaper destinations at neighbouring countries.
Taking a strong exception of Government policies, Mr. Manbeer Choudhary, ex-president of the FHRAI and the President of the 'Hotel and Restaurant Association of Haryana, expresses his disappointment at the lack of coordination between the Government and the private sector.
He says, "No concrete tourism policy at national and state level, critical urgency to rationalize tax structures, high cost of land in metros leading to higher room traffics, lackadaisical attitude of the state governments towards the importance to tourism, red-tapism and bureaucratic approach are few of the things which have resulted in delays in tourism products."
He also asserted that the inadequate infrastructure, like underdeveloped airports and other connectivity steps like roads/metro linkages and lack of hotel rooms in the country were a major pointer toward this.
However, Mr. Choudhary describes that domestic tourism in India has come of age and it is touching new heights and that hotels of all segments are reporting strong occupancies and average rate. "I would say that a buoyant domestic economy, the aviation and real estate boom, initiatives to liberalize foreign investment and improve infrastructure and perhaps, most importantly, the efforts to communicate the Brand India message have contributed to strong demand conditions in most cities across the country.
The result is that India is today one of the world's fastest growing hotel markets," he tells. According to him, the last three years have been particularly exciting with the industry performing exceptionally well and more interestingly, it has taken us approximately 11 years to reach or exceed the previous occupancy highs seen in the mid nineties. He feels that the current trends will continue and present a bright future for the hotel industry in India.
Talking about the forthcoming Commonwealth Games, Mr. Choudhary explains that Commonwealth Games is like a shot in the arm of this tourism industry as it has accelerated the construction and the progress of infrastructure like the airports, flyovers, connectivity by metro rail and road to be enhanced and overcoming shortage of hotel rooms in the NCR.
He believes that this wealth of improved infrastructure and new hotels besides cleaning up the city like Delhi will leave a remarkable impact on the visiting tourists. He adds that the most important gain is that the demand -supply imbalance in a city like Delhi, where Hotels have been charging very high tariff
The recent plans and initiatives under the stewardship of Tourism Minister Ambika Soni, for example, visa on arrival for the foreign traveller, improving infrastructure status for the hotel industry, modernization of airports and construction of more International Airports in major towns, encouragement of public private partnership, involving private sector in decision making by encouraging various association of the trade are of great encouragement to the industry.
So as a industry which is not only linked to luxury or is not just a service provider but also an industry which is an employment generator, the government needs to realize that tourism alone has the capacity to stimulate wide spread direct private sector investment. With effective planning and development one can make more productive and valuable use of the country's vast continental landmass where other development may not be feasible. Also, the government's own efforts can covert this tourism into a money spinner sector as tourism has been aptly describe as "one of the most remarkable economic and social phenomena of the last century."
So what are we waiting for?
By Leichombam Kullajit
(The writer is a seasoned journalist with expertise in hospitality and travel trade)
