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JB Singh of InterGlobe Hotels says hospitality norms, policies need to be reworked, rationalized

He says that the current policy regarding building hotels and land use is highly inefficient.

He says that the current policy regarding building hotels and land use is highly inefficient.

India needs to rework its hospitality policy, especially to rationalize the criteria for building hotels, to develop and unleash the full potential of a sector that includes tourism, travel, hotel accommodation, Includes a bouquet of businesses such as food and beverage, entertainment/sports and MICE. JBS Singh, president and chief executive officer of InterGlobe Hotels, the hospitality arm of InterGlobe Enterprises, a conglomerate that operates hotel chain Ibis and airline IndiGo.

“There is an urgent need to rework the hospitality policy as an existing policy around building hotels and land use which is extremely inefficient. The way set back norms work, the height versus set back ratio and the way FSI works, all need to be re-clarified and reworked for the industry to improve,” Mr. Singh said.

Under the current norms, economy (or budget) hotels are mandated to build large-scale car parks that often go decrepit or unused. “There is an urgent need to rationalize these policies to make our investments more efficient. This is something that the government has to work on in consultation with the industry.”

Elaborating on the current mismatch, he said that corporate buildings, residential construction and hotel properties cannot be compared. Hotels were here only to sell rooms on rent, they were not realizing FSI by selling immovable property.

“We are asked to build car parks which are disproportionate. Guidelines regarding parking norms vary from municipality to municipality. Unfortunately, economy hotels are said to provide more car parks than luxury hotels. It doesn’t make sense when budget hotels don’t have banquets and don’t have enough cars. This is a big mismatch,” he explained.

According to Mr Singh, another major issue that was hurting the hospitality sector was the incredibly high liquor license cost in the country.

For example, he explained, in Bangkok, a liquor license costs around 1,000 baht which is around ₹2,000, and a license would allow a hotel to open 4 liquor shops in the building. Whereas in India, the cost of a liquor license ranges between ₹20 lakh and ₹45 lakh per year, and each seller needs a separate license, he pointed out.

“Heavy licensing costs make alcohol very expensive in hotels, making it unaffordable for guests. This ultimately creates an unfavorable scenario. The license fee should be linked to the earnings from alcohol to make it viable. He added.

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