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More investment needed in Budget hotel segment

At a recently concluded ‘Invest North’ seminar organised by the industry chamber Confederation of Indian Industry (CII), the session titled ‘Destination North: Harnessing the Tourism Potential’ saw players of the industry talking about the current scenario and investment opportunities in tourism sector in Northern states. The session was moderated by KB Kachru, Chairman Emeritus and Principal Advisor of South Asia at Carlson Rezidor Hotel and panellists were Pronab Sarkar, President, Indian Association of Tour Operators; Rahul Pandit, MD & CEO, Roots Corporation; Apurv Kumar, Owner, Clarks Group of Hotel and Mandeep S Lamba, MD, Hotels & Hospitality Group, JLL India.

Kachru started off with a question on the priority of tourism in our nation to the panelists. “We have never had tourism in our five year plan. This shows we haven’t taken tourism seriously. Tourism actively contributes 10 per cent to our GDP. Tourism employment generation is growing by two per cent Y-o-Y. The Government has now started realising and put tourism as a priority but must execute the plans quickly,” Kumar opined.

Sarkar also echoed the similar opinion but in a candid way. “I see no change in the last 10 years. There are a lot of agendas but things are not moving. The only positive thing is our PM is talking about tourism. Today, tourism is totally run by the private sector. PM Modi’s visition is to welcome 20 million tourists by 2022; today we are touching only nine million. It is a herculean task. There has to be more synergies between the ministries to improve this sector. Demonetisation did impact tourism segment a lot. Foreign tourists were affected. GST on tourism in India is at the highest level. The safety and security of tourists is a major concern.”

Further the panel discussed on the potential of tourism and tourism related infrastructure in the country. “We are discussing some of the issues which were discussed a decade ago nothing has changed. Today, there are close to 80 hotel brands are running in India. The Government has a lot of plans for the tourism sector, but good intention does not turns into good deeds. In the last 50 years, we have only been able to promote the golden triangle circuit. We have a lot more circuits which need to be promoted. Globally, there are many cities which have more rooms that entire India put together. So still there is a lot of potential for investment in India,” Lamba opined.

Today, India is witnessing an exponential growth in the middle class; this has led to demand in the budget hotels segment. Speaking about the growth and demand Pandit said, “As the economy has matured the Maslow has changed with travel becoming a biological need. India is amongst the youngest major economies in the world. In India, the total lodging need per day is close to 1.4 million rooms. We need more investments in the budget category. Tourism should be on the federal and infrastructure list. Land for tourism should be protected and should not become a tradable commodity. In India, land for hotels cost 50 to 60 per cent more than the other nations.”

Kachru also spoke about the need for more circuits and experiences in the nation. Lamba said, “In India there is a perception that tourism is all about monuments, it is about the complete experiences. In India, most of the tourist centric places have no world-class infrastructure. We need to create more experiences to boost the economy.” According to Sarkar, tourism moves where there is infrastructure. “Apart from Taj Mahal we have to create more experiences in India and also market it. We need to build more family centric destinations. We need thematic tourism in the county. Also, the Government should come up with some strong policies for tourism,” he advised.

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