Build Tourism Parks for Hotel Accommodation
By Anil Bhandari
TOURISM is an economic activity that needs to be developed at a faster pace within the country. We have more than 200,000 hotel rooms in approved and unapproved - categories, but there's clearly a need for more.
The country received 6.97 million international tourists in 2013 and the number rose to 7.46 million in the year just gone by -- a surge of 7.1 per cent, thanks mainly - to the implementation of the Electronic Travel Authorisation (ETA)-enabled Visa on Arrival facility being extended to the citizens of 43 countries. By 21 January 2015, less than two months from launch of this facility, as many as 41,114 ETA-enabled visas on arrival had been issued. This number is only going to go up.
There's therefore clearly a need for an additional 200,000 hotel rooms, especially because the country is moving towards the target of 10 million tourist arrivals in the near future.
As the Government of India plans to extend ETA to France, China, UK, Spain and Italy, this facility will cover 63 per cent of India’s source markets, making it very likely for the country to reach the goal of 1 per cent share of global international arrivals within three years. India’s share was a mere 0.64 per cent in 2013.
Taking into consideration the substantial surge in the number of Domestic Tourist Visits (DTVs), with the 1,145 million DTVs in 2013 marking a 9.6 per cent growth over the 2012 figure, the Ministry of Tourism has approached the Government of India to provide incentives to the hotel industry, such as the much-demanded infrastructure status, to spur expansion.
The private sector is not investing in the development of hotels because of the high cost of land as well as non-availability of approved land in most cities and around places of tourist interest. Commercial land needs to be converted for hotel construction, but the process is cumbersome and expensive. Most developers, such as DLF, Unitech, Parsvnath and Hiranandani, have decided not to build hotels. They are also deterred by restrictive building norms/bye-laws, cumbersome procedures and the insistence on multiple clearances.
To alleviate the land problem, I suggest that the government must create tourism parks and give land parcels on lease to developers for building hotels. The government has created parks for the development of industrial parks, IT parks, and parks for textiles, food processing, education, and so on. Why can't we have tourism parks for the hospitality industry so that hotels can be build on reasonably priced land? This will address a major challenge confronting the industry, which is already crying for infrastructure status and is weighed down by the high cost of capital because of high interest rates.
In case state governments do not have the financial resources to create tourism parks, the Ministry of Tourism should step in and lead the initiative.
What is a tourism park? It is defined as a tract of land with defined boundaries, suitable for developing into an integrated tourism complex with prescribed carrying capacities for tourist facilities and activities, and the requirement that the environment and the culture of the place has to be maintained. A tourism park has to be in or near an area of tourist interest facing a shortage of accommodation. And it should convey the flavour of local and regional structural designs, culture, arts, crafts and architecture, instead of following the standard matchbox pattern of urban construction.
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Steps to Create Tourism Park
For the creation of tourism parks, we suggest the following steps:
’’’’’’-Conduct research and feasibility studies
’’’’’’-Carry out a SWOT analysis
’’’’’’-Prepare for development and sustainable tourism plans for 15-20 years and implement them keeping an eye on the resources available
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Suggested Facilities at Tourism Parks
’’’’’’-Hotels in five-, four-, three-star and budget categories
’’’’’’-Convention centre
’’’’’’-Food courts and restaurants
’’’’’’-Shopping centres and malls
’’’’’’-Amusement parks and amphitheatres
’’’’’’-Handicraft shops
’’’’’’-Medical services
’’’’’’-State tourism offices and information centres
’’’’’’-Airline, railway and road transport offices
’’’’’’-Travel agent and tour operator offices
’’’’’’-Tourist police stations
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Development Process
Besides identifying areas with high tourist potential, the state governments should:
’’’’’’-Enact special legislation for tourism parks
’’’’’’-Conduct research to figure out carrying capacity of destinations
’’’’’’-Acquire land and develop a Master Plan consistent with the Ministry of Tourism’s plans and identify boundaries for notification and development
’’’’’’-Create integrated tourist facilities at one place with Local and Special Area Development Authorities as well as the Private Sector
’’’’’’-Lay down the basic infrastructure: roads, electricity, sewerage lines, water supply, telecom facilities, and so.
’’’’’’-Ensure control over the area by laying down regulatory conditions
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Offer Incentives
We suggest the incentives listed below to encourage the private sector and to fast-track setting up of tourism park projects:
’’’’’’-Offer land to the private sector at reasonable rates.
’’’’’’-Give landholding rights to investors endorsed by the Department of Tourism and subsequently registered or given locational clearance by the Tourism Park Authority.
’’’’’’-Offer fiscal incentives such as exemption from income-tax, state and local levies, duty-free import of capital equipment required for technical viability and operation of the registered activities of the enterprises.
’’’’’’-Remove restrictions preventing foreign ownership and leasing of infrastructure.
’’’’’’-Give incentives for early completion of projects.
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Win-Win Situation for All-Benefits to Tourists
’’’’’’-Availability of integrated facilities at one place.
’’’’’’-Greater choice because of the basket of services.’’’’’’
’’’’’’-Safety and security, for these parks will be free from touts and beggars.
’’’’’’-Competitive and transparent pricing.
’’’’’’-Clean and regulated environment.
’’’’’’-High-quality international hospitality standards.
’’’’’’-Best in class experience.
Benefits to States
’’’’’’-Higher inflow of investments.
’’’’’’-Increased employment opportunities.
’’’’’’-Easier to regulate environment.
’’’’’’-Focused tourism development.
’’’’’’-Income generation through sales of leases/taxes.
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Benefits to Investors
’’’’’’-Lower capital investment as land will be on lease.
’’’’’’-Single-window clearance.
’’’’’’-Environmental controls.
’’’’’’-Fiscal benefits, tax holiday.
’’’’’’-Availability of integrated facilities at one place.
’’’’’’-Greater choice via a basket of services.
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The Ministry of Tourism should consider a comprehensive action plan for setting up tourism parks and make it a part of the new tourism policy. All stakeholders, including the central and state governments, associations and professionals of the hotel industry, travel agents and tour operators, should be associated actively in the drafting of the new tourism policy to make it a success on the ground. Sufficient funds should be allotted either by the state governments, or, if they cannot do so, by the Centre to develop tourism parks in the financial year 2015-16.
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After serving as Chairman and Managing Director of the India Tourism Development Corporation (ITDC) and MD, Travel House India, the author has been running his own consultancy, AB Smart Concepts
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