Going by the large number of starred hotels that are mushrooming in the city, one would assume that tourism here is thriving. But the truth is that the city faces an oversupply of rooms, with little room occupancy.
This was revealed on Thursday at a press conference held by the Hotels and Restaurants Association of Western India ahead of their 17th Regional Convention titled ‘Tourism: Awakening the Sleeping Giant’. The convention will be held on Friday in the city. Issues plaguing the growth of the hospitality industry were discussed during this press conference.
Vinay Chautalia, president of Poona Hoteliers Association, said that statistics reveal that on an average, room occupancy amounts to a mere 50-60% in the city.
“Occupancy is gradually dropping further. Also, the average room rates for three, four and five-star hotels is between Rs4,000 and Rs4,500,” he added.
In 2001, the number of rooms in Pune amounted to 800. In 2013, it jumped 10 times to 8,000. But that hasn’t deterred enterprises like Novotel and Conrad Hilton, who will soon be setting shop in the city, along with other big international players. “International hotel chains are primarily looking to establish budget hotels in Pune,” Chautalia added.
The association also lamented that the government laws and policies are hampering the hospitality industry in Maharashtra.
“The entertainment tax (25%) is highest in Maharashtra as compared to other states. Hence, the state has lost out to numerous music concerts and fashion shows. If a five-star hotel gets a musician to perform at their venue, they need to pay Rs2.5 lakh in taxes. For a four-star hotel, it is Rs2 lakh, whereas for a standalone restaurant, the amount is Rs50,000,” said HRAWI president DS Advani, adding that 800 musicians in Mumbai had lost their jobs recently due to this.
The association has also urged the government to identify tourism specific zones in Maharashtra, starting with Mumbai, to promote tourism in state. It wants the government to allow tourism-related activities to continue long till night, while law-enforcing authorities patrol the areas.
“We could follow the example of Shanghai, which has such a measure in place. The closing time for restaurants and discotheques could be extended, among other things,” said Advani.
HRAWI also wants the government to relax property tax and excise duty, along with faster, simplified official procedures.