We Will Contribute 9% of GDP
By Dr. Jyotsna Suri
INDIA has got anything and everything a tourist may want. Each state of the country has completely different experiences to offer, making India a sensory delight for even the most jaded traveler, yet our share in the international tourist traffic is a mere 0.65 per cent. Our hospitality industry also is not out of the stagnation that afflicted it after the 26/11 terrorist strikes on Mumbai in 2008. Yet, I see a turnaround taking place by 2016.
We have a Prime Minister who understands the necessity of tourism and is bullish about it. The government's determination to implement the GST regime effectively and efficiently is truly going to benefit one and all. GST is the biggest economic reform the country has ever seen. Yet, there are industry-specific issues that the government needs to address to spur growth.
The hospitality industry has been seeking infrastructure status so that it gets land cheaper and electricity at industrial rates to offset the high cost of capital, which has made returns on investment our biggest worry and development of hotels a nightmare. The cost of operating hotels is rising exponentially every year, especially because of salaries, bank interest charges and energy costs heading north. There's no escaping these costs because ours is one industry that never sleeps. Unsurprisingly, the hotel business is pretty much stagnant now. It's not a lucrative business to get into.
The absence of infrastructure and poor connectivity is a challenge we share with every other industry. It is because of this drawback that a vast national potential remains untapped. Take the case of the journey to Bekal, our luxury resort and spa in the Kasargode, Kerala. It takes back-breaking journey from Mangalore to reach there. It's not that we don't have roads and railway tracks. But they are in a terrible condition. All we need are better roads, better railway tracks and better railway coaches.
The good news, though, is that the government is focused on its development agenda and tourism is a big part of it. There's a positive sentiment everywhere and I see the hospitality industry's contribution to the GDP going up from 6.9 to 9 per cent once the economy stabilises and the quality of infrastructure shows an improvement. A prudent GST regime, reasonable cost of capital, superior connectivity and clean accommodation options are together going to drive a renewed growth in the industry. In fact, if we keep our heads above water, we can look at great possibilities from 2016, which I foresee as the year of renewed growth.
As for The Lalit Suri Hospitality Group, we see our future growth taking place mainly in the mid- segment. Once we complete our upcoming hotels in Ahmedabad and London, we will end our forays into the luxury segment and focus on developing two-to-four-star hotels in the land parcels we possess. Our mid-segment brand is The Lalit Traveller, which already operates 40 rooms in Jaipur and 15 in Khajuraho, but these are within luxury hotels. This is the segment where all the growth is going to take place. And this is where we plan to stay.
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