The Union government is planning to add 100 budget hotels by 2016 in a bid to give a boost to the hospitality sector. The tourism ministry wants to set up these hotels through public-private-partnership (PPP) in one-, two- and three-star categories, besides add 3,440 rooms by the end of the 12th Plan period (2012-17).
The land for building these hotels will be allotted through a “transparent bidding process”, according to tourism ministry’s working group report on the 12th Plan. Companies with a minimum experience of five years in running budget hotels will be allowed to bid for these as per a report in Business Standard by Ruchika Chitravanshi.
Indian Hotels’ budget brand Ginger operates the IRCTC-Rail Yatri Niwas in Delhi on a PPP model with IRCTC. The company is keen to expand through such arrangements in future, as well. “This is an encouraging development. Availability and affordability of land at the right location is becoming a challenge and, therefore, impacting roll out of hotels, especially in the budget category,” said Prabhat Pani, CEO, Ginger.
The PPP agreement will be signed on a build-operate-transfer basis for a period of 20 years. Only after this time frame be a hotel allowed to increase its star-rating above three.
According to a research by consultancy firm HVS India, the number of branded hotel rooms in India would go up by 43 per cent to 102,438 by the end of year 2016 from 71,531 now. Of this, 13,316 rooms would be in the budget category.
The tourism ministry will ask the land-owning agencies at the central and state level — such as the state tourism corporations, local urban bodies, gram panchayats, Indian railways, state road transport corporations and port trusts — to identify suitable land for the construction of budget hotels. Existing properties or land of state tourism corporations will also stand eligible. The ministry plans to provide financial incentives and grants to the land-owning agencies.
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