The Hindu Business Line : `Public-pvt partnership in tourism turns sour'

"Beleaguered by inordinate delays in the decision making process, lack of transparency and a relatively high cost regime, the pioneering partnership between the private and public sector in Kerala's tourism industry is fraying at the edges," sources in the industry said.

These factors have given an inherent advantage to neighbouring States, which have been quick to get their act together. "The sleeping giant in Tamil Nadu is waking up; Pondicherry is conjuring up new initiatives and Karnataka has been consistently wooing private sector and new entrepreneurs to explore and exploit its new and nascent territories," Mr Jose Dominic, Managing Director of the CGH group of hotels said.

It had been a tremendous decade for Kerala's tourism. The revenues had shot up to Rs 6,000 crore annually, employing six lakh people and clocking double-digit growth figures. The demand side is still strong, but the supply side has begun to weaken. Quality rooms are no longer coming up at the earlier hectic pace. New properties have not been coming up in yet to be explored virgin regions and the established destinations are getting overcrowded.

"A high tax structure has been wearing down the resources of the industry and reducing the quality of service," the sources said.

On the cost front, the appendages for the hospitality industry are among the highest in the country. While Karnataka and Tamil Nadu have given a reprieve to their nascent industry by reducing luxury tax, Kerala's tax remains substantially high, the sources said. The bar licence fees in the State are exorbitant at Rs 15 lakh per year.

At this rate, Kerala's legacy as God's Own Country might soon turn out to be a thing of the past.