Business in cities adjoining Gujarat has flourished because of the state’s dry laws, however, if this is now amended as anticipated, their fortunes may wane, finds Charu Bahri.
The new tourism policy of Gujarat is expected to be released on 01 May or soon thereafter, to coincide with the golden jubilee celebrations of the state. Hoteliers have urged the government of Gujarat to relax its dry laws in order to give the state’s tourism industry a much needed boost.
“Meetings, Incentives, Conferences and Exhibitions (MICE) tourism has not developed in the state because of the existing prohibition laws. We are also losing out on domestic tourism which should be the mainstay of the tourism industry. At present, Gujarati tourists head to Daman and Silvassa in the south, Diu in the west and Mount Abu in the northern precincts of the state. The hospitality business is by and large only patronised by the corporate sector,” said Sanat Relia, vice president, South Gujarat Hotels and Restaurant Association.
The Association suggested opening 25-liquor shops in larger hotels in each of Gujarat’s metro cities and 10-shops in hotels in the smaller cities, excluding pilgrimage sites like Ambaji, Pawagadh and Somnath.
It also recommended simplifying the process of issuing permits to local residents and out-of-state tourists, such that hotels should be authorised to issue temporary permits to citizens above 35-years of age holding a PAN card. If the suggestions are implemented, Relia foresees the turnover of restaurants doubling and a 25-to-35% increase in the coffers of the hotel industry in the next three years.
“Leisure and business travellers and event planners shy away from the state because of our dry laws. The existing policy provides for group permits wherein only participants of an event from outside Gujarat are issued permits. This is ridiculous; the local participants are expected to just sit and watch the fun,” said Yogesh Joshi, managing director, Newlight Hotels & Resorts Ltd, owners of The Gateway Hotel, Vadodara.
Narendra Somani, president, Gujarat Chapter, Hotels & Restaurants Association, and also chairman and managing director, The Grand Bhagwati Group, is appreciative of the positive changes that have already been implemented by the government of Gujarat.
He is hopeful that more good news will follow soon; “The government recently relaxed the prohibition laws for tourists visiting from outside Gujarat, who can avail permits on arrival in the state. This, coupled with the rapid development of industry and infrastructure, has significantly increased occupancy rates in recent years.
The MICE segment has also grown. But, if the new tourism policy further incorporates the proposals made by our association by focussing on tourist infrastructure and relaxing prohibition laws, it would ensure the tourism industry of a 10-to-15% growth,” said Somani.
Joshi further said that if the group permit system for events was streamlined, it could boost occupancy rates by 25-to-30% to begin with. It would also increase the overall room requirement, thus encouraging investments in new hotels, restaurants, and allied businesses, as well as generating more employment opportunities. “Plus, the state government would benefit from the higher revenues on account of luxury tax, VAT, license fees and vehicle taxes,” he added, estimating this move to generate increased revenues to the state government of at least Rs2000 crores annually.
Said Nicholas Fernandes, general manager, Fortune Landmark Hotel, Ahmedabad: “The impact of the amended policy is likely to be positive but it will depend on what it entails. Corporate clients would perhaps be inclined to extend their stay by a day or two for leisure now, instead of rushing back as soon as business is transacted. The policy may also be favourable for enhanced local business.
However, if it only allows hotels to serve alcoholic beverages in the confines of bars/permit rooms and not in restaurants, it may not significantly impact leisure tourism, as tourists are generally looking to wine-and-dine in a free, unrestricted environment during their stay.”
Agreed Arvind Gupta, managing director, Neesa Leisure Ltd and The Cambay, Gandhinagar: “Average occupancy rates may go up by as much as eight-to-ten per cent if the permit system is liberalised, as foreign and Indian business travellers would be able to enjoy a night life which is presently virtually non-existent. Investments in new hotel chains and the tourism sector will also increase.”
The Tourism Finance Corporation of India (TFCI), hired to prepare the state’s draft tourism policy, has recommended setting up 14 ‘wet zones’ in a bid to promote beach tourism in Gujarat. If the change in policy is limited to these ‘wet zones’, supposedly including Shivrajpur, Kutch-Mandvi, Ahmedpur-Mandvi, Ingleshwar and Suvali, then hoteliers across major cities in Gujarat will not be affected at all.
Gupta is keen to see beach tourism come up in Gujarat and believes that liberalising the consumption of liquor could increase leisure tourism by 30-to-35% however, he would like the amendments in the policy to be comprehensive and not confined to watering holes on beach fronts.
If beach tourism is developed as recommended by the TFCI, hoteliers in Daman, Diu and Mount Abu are likely to be adversely impacted. Speaking on condition of anonymity, a manager of a leading resort in Daman said: “The development of 14-wet zones on Gujarat’s beach fronts is not likely to severely impact our business. Most of our guests are corporate clients and leisure tourists frowm north Maharashtra – especially Mumbai and Nasik – and a few from Gujarat. But the smaller hotels and resorts in Daman see huge crowds pouring in from neighbouring Gujarat with the sole purpose of living it up on week-ends and holidays. These establishments may be significantly affected.”
