Hotel projects over Rs 50 crore to get infrastructure status

The Union tourism ministry has proposed to accord infrastructure status to hotel projects costing in excess of Rs 50 crore.

"We have already circulated a Cabinet note to bring down the threshold level (for hotels) to about Rs 50 crore. We are hopeful of getting it through Cabinet. Once that is done, I think smaller players can also come and invest in the hotel industry here which is really needed in this country," said Tourism Secretary Rashmi Verma.

Speaking to PTI on the sidelines of the third edition of FICCI's Tourism Investors Meet on Wednesday, she said that it was a "great opportunity" for small investors and the ministry was keen on more homestays and bread and breakfasts across the country.
 

This proposal, if approved, would lower the threshold limit from the current Rs 200 crore for hotel projects to qualify for priority lending.

Verma said that the need to decrease the threshold limit was to bridge the shortage of around one lakh classified hotels cross the country by enabling smaller investors to build hotels.

"The tourism sector suffers from a gap in terms of world-class infrastructure development in the country's tourism destinations. There was a shortage of one lakh classified hotel rooms in the country and this gap can be bridged only by the states alone as they adopt investor- friendly policies. The government is looking into giving infrastructure status to smaller units," she said.

Verma also said that tourists no longer choose India as just a destination and the focus is on "experiential tourism" such as cruise tourism, adventure, eco and textile tourism.

The ministry is also in the process of revamping the overseas offices to reach out to tourists across the globe, she said.

India has seen a 19.5 per cent growth in foreign tourist arrivals in May, 2017, over May last year.