Hospitality sector demands change in infrastructure status to drive growth, benefit more cities

Hotel Association of India (HAI) on Thursday demanded that the infrastructure status of the hospitality sector be amended to spur growth and help more cities benefit from it.

The sector has recovered from the impact of the pemic, dandriven by domestic travel with occupancy level in latest June quarter higher by 4 per cent as compared to the pre-COVID level and average room rate up by 16 per cent, HAI President Puneet Chhatwal said here at the Hoteliers' Conclave 2022.

"Amending the hospitality sector infrastructure status will incentivise and spur hospitality development which is the need of the hour," he said.

Today, that infrastructure status is limited to cities with a population of one million, he said adding, "going forward we could increase it to five (million). A lot of cities will benefit."

As the infrastructure status accorded to the hospitality sector is based on a decision taken in 2011, Chhatwal, who is also Managing Director and CEO of Indian Hotels Company Ltd, said it needs to be amended "so that it is in tune with time and more cities can be covered".

"If we can get infra status (amended), that will help in getting cheaper loans and have a larger or longer moratorium period. That will make investments more feasible, as the sector is very capital intensive, and is very labour intensive," he said.

HAI has also made representations to the government regarding services export incentive scheme on "how that can be improved so that, specially small and medium sized companies, can benefit...In terms of working capital after two years of very difficult survival phase."

In terms of the potential of the travel and tourism industry, Chhatwal said it has the potential to grow three times from the pre-pandemic levels to USD 600 billion by 2030 and accelerate by five times to reach USD 3 trillion by 2047.

He said employment generation can also increase from "40 million in pre-COVID to 60 million by 2030 and eventually 100 million jobs by 2047".