Sunday, 24 January 2010

Incomplete hotels to loose out of tax holiday...!!

Major hospitality chains planning to open properties in the national capital region (NCR) before the Commonwealth Games (CWG) in October could lose out on the five-year tax holiday benefit if they are not able to throw open the entire room inventory before the sporting extravaganza.

According to tourism secretary Sujit Banerjee, the ministry would oppose full tax holiday to companies not closing projects on time. “How can hotels open partially and yet get the tax-holiday. They will have to come to us for registration and classification, and we will not allow such a thing”.

A host of hospitality majors, domestic and foreign including the Taj Group, InterContinental, Hilton, Starwood Hotels and Resorts have projects in the pipeline, which are slated for launch before the Commonwealth Games. While InterContinental group plans to open its Crowne Plaza in New Delhi before the Games, its two other properties would be operational in 2010 but not necessarily before the CWG.

“By opening partially, hotels will not only gain the benefit of the five-year tax holiday (except for five-star properties which are outside the ambit of the scheme), but will also get their licences fast as the ministry is under immense pressure to get the required rooms ready,” said a hospitality consultant on the condition of anonymity. The tourism ministry is also pushing for an extension of the tax-holiday till July 2010 from the earlier March deadline (Click here to read previous report).

According to market estimates, only 50% of the total proposed room inventory will be ready before the Games. Though some hotel majors maintain they will launch full operations of their properties, sector analysts and experts are of the opinion that ground realities are different and as projects are met with delays, owners are planning to go for only partial openings.


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