Indian hospitality may soon get one of its most longstanding demands, to be categorised as an infrastructure industry.
“Indications from the Centre are positive and the possibility of us getting the infrastructure status this budget is nine on ten,” said Vivek Nair, vice chairman and managing director, Hotel Leelaventure.
Nair, in his various capacities at the FHRAI – including president – has played a central role in the industry’s long-standing effort to change the government’s perception of Indian hospitality from that of luxury to an essential service segment. The main goal being to easy capital flow and lending norms for this capital intensive industry.
As momentum builds, the industry has been joined by key Indian trade bodies such as FICCI, who earlier this month released a study in favour of hospitality as an infrastructure industry among other important concessions. ‘Granting infrastructure to the hospitality industry will encourage re-investments in the hospitality sector’: the FICCI-Evalueserve study said.
In Q4 ’09, the Centre made an important concession in the progress towards the reclassification as infrastructure by delinking Indian hospitality from the commercial real estate classification.
The banking sector too feels the change in status is imminent and has begun sending out feelers. “Seven year projections are not long for us. ICICI is comfortable with long-term lending as we support infrastructure projects with 15 and 20 year loans. While we will continue to lend against cash flow, hospitality projects with 10 years and even longer terms are a possibility,” said Chanda Kochhar, MD & CEO, ICICI at the recently concluded HIFI 2010 in Mumbai.
