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Hotels run by the India Tourism Development Corporation, the Central Public Sector Enterprise under the Tourism Ministry, can be revived with some investment and government action, said Trinath Behera, Director (Finance), ITDC.
After a gap of eight years, “we could make sales of over ₹500 crore and pay 20 per cent dividend to the government,” Behera said.
Finance Minister Arun Jaitley had last month said ITDC could be the first in line to be “divested strategically”.
ITDC posted a total turnover of ₹504.19 crore in 2014-15 compared with ₹469.58 crore in the previous fiscal. The profit after tax (PAT) surged 264.86 per cent at ₹34.37 crore against ₹9.42 crore.
At present, ITDC runs 15 hotels in the country. In 2013-14, only six hotels posted profits.
The problem is managing the salary/wage bill of the employees due to which ITDC is incurring losses in many units, he said.
When asked which hotels might be put under the hammer, he said, “We are not clear on exactly which lines the Government is thinking. At this juncture it is very difficult to say. The Tourism Minister has repeatedly said that leasing out is the last resort and we have to look at various options before that.”
As a few properties are on the verge of being revived, “it will be more prudent if the government takes case-by-case decision for each hotel instead of mass sale. Also, if for some properties, the government helps us in getting some issues tackled like State government clearances, then revival can be quicker,” Behera said.
With talks of divestment doing the rounds, ITDC is in a dilemma on whether to invest in renovation.
“The Bhubaneshwar hotel was in losses as rooms were not renovated. After renovation, occupancy has gone up to 70-80 per cent. With the news of divestment, we are thinking whether we should invest money or not,” Behera said.
“Hotel Jaipur Ashok can be revived with an investment of ₹4-5 crore. The property in Guwahati is facing issues as the area near Brahmaputra was declared as silent zone. So marriages and events cannot take place.”
The Bihar Government owns 49 per cent stake in Hotel Ranchi Ashok. With renovation underway, “the Centre can decide to sell it now or in two years. At this point, it will be foolish to sell it as all your investment in renovation is gone and will be enjoyed by third party,” he said.
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