Tourists may not have filled up rooms during the ongoing Commonwealth Games as expected but instead of feeling down, hoteliers are optimistic about the future.
Seeking to cash in on the incentives that the government doled out for creating capacity for the Games, industry experts said the hospitality sector stands to gain a lot in the long run from the development.
"No one builds hotels for 15 days. Let's look at it as a long term investment that has long term benefits," ITC Hotels Divisional Chief Executive Nakul Anand told PTI.
Expressing similar sentiment, Asian Hotels (West)Chairman and Managing Director Sushil Gupta said: "Creation of an additional capacity is good for the country's infrastructure."
In this year's budget government had extended the benefit of investment linked deduction in tax to new hotels of two- star category and above anywhere in India.
In 2008-09, the government had announced a five year holiday from income tax for two, three or four star hotels that are established at the 'World Heritage Sites'.
Despite the dismal turn up of tourists during the CWG, Federation of Hotel & Restaurant Associations of India Arjun Sharma said occupancy levels are expected to go up as the season peaks.
"We expect occupancy to go up to 80 per cent in coming season. Yes, additional supply was created for the CWG, because of which there was a little drop in the hotel tariffs in Delhi and NCR. But hotels across segments are revising the rates upwards," Sharma said.
The Tourism Ministry had forecast 52,951 foreign tourists and 1,39,754, domestic travellers to come during the CWG 2010. Accordingly, the average number of rooms required per day for these tourists were estimated to be 40,190 units, far more than the actual demand being seen right now.
Gupta of Asian Hotels said the government always projects big numbers on the expected tourist inflow.
"It is true that enough number of tourists have not come to India to see the Games, but this is not surprising at all," he said, adding a similar situation was seen during the Asian Games in 1982.
With an expectation to have a good business in the coming months, most of the hotels have either taken price hikes or in the process of increase the tariffs.
"Many hotels had announced up to 15 per cent increase in tariffs and another hike is expected in November," Elara Capital, analyst Himani Singh said.
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