The Telegraph
Since 1st March, 1999
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Deloitte & Touche to pen hotel selloff primer

Calcutta, Oct. 28: The Federation of Hotel and Restaurant Association of India (FHRAI) has appointed management consultant Deloitte & Touche to draw up a strategy for privatisation of state government-owned hotels.

“There are 2,000-odd hotels of different sizes across the country that are owned by state governments. We have asked Deloitte & Touche to draw up a list of all those properties that could be privatised. They have started working on it and are expected to submit their report early next year,” Shyam Suri, secretary general of FHRAI, said here today.

“Private individuals would manage these hotels better than state governments,” he said.

“Recently some states like Punjab and Karnataka have taken initiatives to privatise hotels owned by them but have not been successful in divesting them,” Suri added.

S. K. Khullar, president of FHRAI, said: “We have suggested to the Bengal government that it should divest hotels owned by it, and were told that the government would consider the proposal.”

When contacted, Sourin Bhattacharya, managing director of West Bengal Tourism Development Corporation said: “It is unlikely that we are going to divest properties that employ a large number of people. The corporation has 509 employees.

“We own 33 properties across the state. We manage 25 of them; the rest have been leased out to private individuals. We are soon going to invite bids for management of three more properties — in Asansol, Mukutmanipur and Bankura. Those that were leased out were in partial completion or non-starters.”

Tariff parity

Fierce competition has led to formation of a cartel amongst leading hotels. “Hotels across the country are trying to reach an agreement with their competitors on stemming the decline in room tariff,” Suri said.

“Though I couldn’t say to what extent these efforts have been successful, there appears to be an understanding amongst leading hotels that they are not going to cut room-rates further.”

The hotel industry is trying to pull itself out of the woods after a prolonged recession.

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