Govt calls for more investments in hotel industry

New Delhi, Feb 12 (UNI) To correct demand-supply mismatch in the hotel industry, Government today invited foreign investments into the high growth-potential sector and reiterated its commitment to providing better infrastructure.

''We require huge investments to further enhance our hotel and hospitality sector, as we currently lack 1,50,000 hotel rooms,'' Department of Industrial Policy and Promotion Secretary Ajay K Dua said here today.

He said the government will re-visit the foreign equity caps in the infrastructure sector in March and further liberalise the regulations for the inflow of foreign direct investments (FDI).

Dr Dua added this would lead to an estimated three-fold rise in FDI in the tourism sector to 1.5 billion dollars by 2010 from the current level of 450 billion dollars.

The hotel industry requires huge investments to the tune of over 17 billion dollars, industry body FICCI said in a study on 'Investment Opportunities in Hotel Infrastructure in India' released by Dr Dua.

Speaking at an interactive meeting with the Asian American Hotel Owners Association (AAHOA) delegation, jointly organised by FICCI, Dr Dua told reporters, ''We need to provide good infrastructure such as proper air connectivity, road connectivity, electricity supply, etc to the industry to make our country a global tourist destination in the world.'' FICCI President Habib Khorakiwala said, ''Apart from having over 1,00,000 rooms, we still need more than this figures in a short span of times as the Commonwealth Games are ahead of us.'' He said the railways has vast area of lands in the prime locations of various cities which would utilise it within the next 3-4 years in realty sector.

''This is a great opportunity for the realty majors to clinch it at the right time to become the leader,'' Mr Khorakiwala said.

For the last three year, the tourism sector is growing consistently at 15-20 per cent per annum.

The government has already permitted 100 per cent FDI in the tourism sector, facilitating big hotel chains to invest directly in new properties.

At the meeting, it was also discussed to build budget hotels for the growing domestic and international tourists coming to India.

In 2006, the international tourist arrivals in the country was 4.43 million.

UNI