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Heritage site tax holiday has no takers

Apr 10, 2008 10:26 PM IST Business Business

Bangalore: Its been nearly two months since the Finance Minister announced a five-year tax holiday for hotels built near world heritage sites.

But contrary to initial expectations, the offer has had no takers from the hospitality industry.

A five-year income tax holiday for any hotel that sets up shop in one of India’s 27 world heritage sites before 2013.

So imagine a hotel in beautiful Hampi or waking up to see the sun temple in Konark.

But the Finance Minister's incentive has had no takers yet. Experts in the hospitality industry say the lack of enthusiasm is because just a tax holiday is not enough.

“There are a lot of issues that need to be tackled not just the one tax holiday. Every hotel that is set up needs at least 120 approvals from local authorities,” says Director-hospitality, Cushman & Wakefield (Asia), Akshay Kulkarni.

Add to this, connectivity and infrastructure issues -- most world heritage sites in India do not make for a hotel-friendly environment.

Also, the lack of economic activity in these locations would make finding an adequately trained work force difficult.

"All those hotels need to be serviced -hotels are labour intensive customers expect high end service. So all of those employees will have to be educated and trained,” says MD, Cushman & Wakefield (Asia), Rutger Smits.

Apart from all of these challenges, hoteliers say our heritage site are not well promoted and currently have very little demand for rooms, which make them unviable locations for hotels when compared to our big cities.

So it looks like the Finance Minister will need to do much more to give tourism a shot in the arm.