Cosy affair for hoteliers – a five star hotel in Dwarka

Budget 2007 has brought cheers to the hospitality sector in the country. Buoyed by high growth rate, hoteliers feel that the proposals for the sector in the industry would give a new push to real estate and further their growth prospects. Five-year tax holiday for two, three and four-star hotels in the National Capital Region is set to give a major boost to the real estate business. Other than these budget hotels, convention centres with a seating capacity of 3,000 in Delhi, Gurgaon, Ghaziabad, Faridabad and Gautam Buddha Nagar (Noida) will also get all central tax exemptions. This holiday is only for the hotels that are complete and start operations in these cities between April 2007 and March 2010. Though the aim is to create an additional 20,000 rooms by the 2010 Commonwealth Games to be held in Delhi, the move is bound to give a major push to the real estate sector. Delhi and its NCR presently has just about 8,000 odd rooms in the 24 five star hotels. The shortage of rooms here also means that the room tariffs are amongst the highest in the world. With hundreds of thousands of people expected to visit the country during the games, the tax holiday announced now is aimed to increase the room capacity in the region. Also, with focus now on economy hotels, the government has extended the tax holiday only to the budget hotels. Undoubtedly, the industry is ecstatic about the move. Chairman of Ansal API Sushil Ansal says: “The Finance Ministers proposed tax holiday for two, three and four star hotels in the Delhi and adjoining areas, though focuses on Commonwealth games, will definitely help the sector grow,” he says, while adding that on an overall basis, the Budget has been neutral. Parasvnath Developers, which is coming up with two hotels in Delhi, too is happy with the announcements. “This move would attract more developers here,” says a company official. The real estate major is coming up with a five star hotel in Dwarka and another hotel in East Delhi. While the realtors in Delhi are happy, hoteliers in other parts of the country rue that these benefits have not percolated down. Manmohan Kohli, a Chandigarh-based hotelier, says that similar package should also have been extended to other places with huge tourism potential in the country. ( The Tribune)