Hotel Association of India seeks infrastructure status for hotels ahead of budget

Ahead of the budget, the hospitality industry is hoping more hotels get infrastructure linked benefits this year and that their much-awaited demand of granting an infrastructure status to the sector is met.

Hotel Association of India (HAI) said on Friday infrastructure status will enable hospitality projects access to finance at better interest rates with longer repayment periods and attract investment.

“The previous budgets have seen a strong focus on developing infrastructure. However, hotels have not been treated at par. The last budget announced the development of tourism in mission mode. Tourism cannot be developed without tourist accommodation,” HAI said in a statement on Friday.

“India tourism vision 2047 is targeting 100 million foreign tourist arrivals and 20 billion domestic tourist visits. The existing hotel capacity and the pace of adding new capacity is grossly inadequate. There is an urgency to develop hotel rooms at a rapid pace and across the length and breadth of the country,” HAI added.

HAI said that the multiplier effect of the sector in the economy is higher compared to manufacturing, and even agriculture. “Every hotel room creates two direct jobs and several indirect jobs. Hotels are also providers of key tourism infrastructure like roads, rail, ports and airports,” HAI said.

Government officials in the tourism ministry concurred that expanding the harmonized list of infrastructure is important for the sector and for jobs creation.

“It currently says funding on an infrastructure status level will be available to hotel projects in locations with a population of less than one million. How to expand that? Can that be expanded to five million? We have to look at it from a commercial perspective. That is a call we should take,” an official, familiar with the matters, said.

“We are thinking on these lines. This is our thought process. Creating jobs is very vital. To grow jobs, we have to grow the industry. Growing the industry means growing the harmonised list of infrastructure,” the official cited above said.

Ministry officials said they are trying to rework the approach to the sector.

“In 3.0, there is going to be more push towards tourism, primarily because of job creation. We should look at sectors such as tourism which are jobs intensive. Reviving the India tourism campaign is also critical for tour operators. We need a bigger campaign for overseas trade fairs. The embassies need to rope in agencies for marketing and promotions in our top source markets,” an official said.