Federation of Indian Export Organizations (FIEO) has recommended for Infrastructure Status to the Hotel Industry. To accelerate the pace of construction of more hotel rooms, the hotel industry needs to be declared an infrastructure industry under section 80-IA of the Act.
It should be given full benefits of concession for infrastructure facilities available to other sectors like airports, seaports, power projects and gas distribution networks.
With the sharp spurt in business and leisure travelers to India, the country is currently experiencing a shortage of almost 100,000 hotel rooms to meet the accommodation needs of the foreign and domestic tourists. The hotel industry is a highly capital intensive industry.
Construction of a new hotel project in 5 Star category demands massive capital investment ranging from Rs 500 to Rs 700 crores. The bulk of investment in a hotel is on land and building which has a very long period of return on investment to the investors.
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