Need FDI in mega-tourism projects
ment. “Such incentives should be extended to all categories of hotels, so that their expansion plans can pick up the required momentum. Also, these fiscal benefits should be extended to the industry to support its growth, which in turn will accelerate the growth of the Indian economy. Post Budget2013, the hospitality sector expects more involvement, thought and initiatives from the government,” she adds. Special Tourism Zones According to Keshav
Baljee, Managing Director, Spree Hotels, there is adequate foreign and domestic investment in hospitality. “In fact, the supply has risen quite significantly over the last few years and hotels are coming up in almost every location. The problem is of oversupply in many markets. The FDI that India needs to attract is in mega-tourism projects such as projects like the Cotai Strip in Macau or Sentosa Island in Singapore. These are transformational projects and can be only done with foreign investments,” he confirms. To attract big-ticket foreign investments, Special Tourism Zones along the lines of the SEZs need to be created. These zones need to have relaxed norms in terms of
The FDI that India needs to attract is in mega-tourism projects, such as the Cotai Strip or Sentosa Island
laws and visa regimes, to enable more foreign tourists to come. “They will also need world-class airports. This can then lead to mega investments in creations of entire cities that can employ lakhs of Indians while generating
India and China are geographies where markets are robust, despite the relative gloom in global markets
huge foreign exchange inflows,” he adds.
CAPEX-driven supply
Rahul Pandit, President and Executive Director, The Lemon Tree Hotel Company informs India currently has one hotel room per 10,000 people versus the global average of 28 rooms per 10,000 people (America has 180 and China 18 per 10,000 people). Clearly the opportunity for investing in the hotel space in the country is a big one and hoteliers can build inventory across segments and across destinations. “Hospitality is a cyclical business. Demand increases at an incremental rate, and as the supply is Capital Expenditures (CAPEX) driven with long lead times; supply release happens in shorter patches, leading to an upwards/downwards turn in the cycle. India and China are now increasingly being seen as part of an exclusive club of geographies where markets are robust, despite the relative gloom in global markets. This rise in the base of consumers, with availability of higher discretionary expenditure has positioned hospitality as a preferred investment sector with favourable long term returns.