Guests in the city

Tourism ministry guidelines on guest houses address the room shortage issue for Commonwealth Games.

In view of the Commonwealth Games to be held in New Delhi in 2010, the city's guest houses will soon come under the purview of the tourism ministry.

In a belated move to augment hotel rooms in the run-up to the Games, the ministry has finalised draft guidelines for approval of guest houses to include them in its hotel classification list. The new guidelines will also help the government in regulating guest house building activity across the country.

A tourism ministry official says that in most of the metros the quality of guest houses are not up to the mark. "They do not observe minimum hygiene standards. The guidelines, which will apply to guest houses across the country, are being designed to address these issues," he says.

The draft proposal was finalised by the government last week and is expected to be circulated in the hotel industry circles for further "recommendations and improvements."

However, seeking government approval for guest houses has been kept "entirely voluntary", and has been left to the owners.

Yet, promoters who wish to get their existing and future properties approved and classified by the government will enjoy several fringe benefits. For starters, like hotels and restaurants, a guest house owner will be able to draw various concessions under the Export Promotion Capital Goods scheme.

For instance, a guest house that meets the government standards will be able to import goods like furniture and kitchen equipment at a much reduced duty of 5 per cent instead of the regular 48 per cent.

"Besides, guest houses will also benefit from the government's international 'Incredible India' marketing campaign," says Rajiv Khanna, promoter of Jukaso Inn which has a total of 82 rooms in two properties in Delhi. At present, the ministry promotes only approved hotels at its 13 overseas offices.

The draft guidelines stipulate that a guest house must have a minimum of 10 rooms with a maximum size of 120 sq ft. The draft further specifies that 25 per cent of the rooms should be provided with air-conditioning as well as facilities such as power backup, security, safe drinking water and a proper kitchen.

Shyam Suri, secretary-general of Federation of Hotel & Restaurants Association of India, feels that it's a welcome way to increase room counts before the Commonwealth Games considering there is little land available to build hotels in the city and land disposal authorities like the Delhi Development Authority quote high reserve prices.

"Apart from giving credibility to approved guest houses, the proposal will augment the hotel inventory swiftly given that the gestation period of new hotels is nearly three to four years," says Suri.

Currently, India faces a shortage of 60,000 to 70,000 rooms. In Delhi alone, there is a shortfall of 12,000 to 15,000 rooms across categories. But with new guest houses coming up, immediate pressure on room availability will be eased.

However, managing director of the hotel consultancy company HVS International India Manav Thadani feels, that the room shortage issue is far-fetched.

He says that at least 24 projects in Delhi are in different stages of development which will go on to add 6,000 rooms in the next few years. "About 500 rooms will be available in the NCR region in next two years alone," he says.

Thadani cites the example of the Sydney Olympic 2000 and said that it "caused a general spurt in demand for rooms for a four- to five-week period but the hotel industry suffered due to the extra supply that came in."

Proper planning, a transparent bidding process and realistic reserve prices for land auctions will do better than short-terms measures to solve the room shortage problem.