Sunday, May 11, 2008

Common Embarrassment

Lack of hotels may make the Commonwealth dream a mirage

India has been a dream destination for backpackers who wanted to get away from busy western world. It was the only place on earth where travellers came to achieve nirvana. Much has changed recently, with a booming economy and the Commonwealth fever, India’s tourism has taken the shape of a global tourist hot spot. India has been working very hard to materialise its dream of making Delhi a world-class city before the forthcoming Commonwealth games – from swanky flyovers to dedicated lanes for high capacity buses to a well connected Metro, the planners are trying to make Delhi a Shanghai before 2010.

But the recent assessment by the Ministry of Tourism makes the scene quite bleak. Official figures shows that there will be a shortage of around 1,50,000 rooms (shortfall will increase by 50%) by 2010 i.e. just by the time the games start. As per FICCI, one of the prime reasons that has offset the growth in the new hotels has been the exorbitant real-estate prices, which had been acting as a hurdle for new initiatives. In fact, the situation is so grim that it will be no less than a miracle if Delhi actually meets its deadline and at best make it ready for the Commonwealth games. On the contrary, India’s neighbour, China, has been refurbishing its infrastructure for the forthcoming Beijing Olympics 2008, since the last five years. It has efficiently and successfully built around a staggering 3,00,000 hotel rooms in Beijing alone. Moreover, 67 international hotel brands have already entered the Chinese market that operates 500 hotels across the country. China has 10 times more hotel rooms than India and the average Chinese hotel room in a five star property costs around USD 300-350, while the prices for the same in India are expected to be around USD 500, just on account of short supply. Interestingly, unlike India, where the focus has been on building new capacity rather than upgrading already established small and medium size hotels of the Capital, China has been persistently upgrading its existing hotel infrastructure. In fact, considering that 2010 is just round the corner, India should immediately take advantage of its hotel infrastructure in and around Delhi by just refurbishing them and also by developing and upgrading the nearby areas. It is anyway more feasible simply because most of Delhi’s small hotels are situated in the vicinity of airports and railway stations, which are further connected by the Metro. To bridge the gap as much as possible, the minimum that Delhi needs to do is concentrate more on unorganised hospitality sector and provide guest houses with incentives to turn them into a mid-sized organised sector. In order to address this shortage, the policy makers came out with the ‘Bed and Breakfast’ schemes that were aimed to cover the shortfall by 10,000 rooms. However, this scheme also fell flat with only 100-150 families willing to participate.

All in all, it is not just a crisis but a matter of huge national embarrassment if we fail to provide the basics during the games, more so when India is dreaming of housing the Olympics by 2020. Not just on account of the games per se, the policy makers should also be concerned about the positive economic externalities of such developmental initiatives which have reaching effects on the nation as a whole!


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