'Hospitality industry hobbled by land costs, taxes, delays'

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SME Times News Bureau | 13 Feb, 2012
High real estate costs, lack of any tax incentive and bureaucratic hurdles are huge problems for the growth of the hospitality industry that is one of the country's top job earners, a survey revealed Sunday.

"The high costs of real estate and lack of any tax incentives by the government are acting as hurdles for the hospitality sector. These challenges are further accentuated by overall infrastructure deficit in the country," said a Confederation of Indian Industry (CII)-PricewaterhouseCoopers (PwC) survey.

The survey covered the top of the mind issues that chief executive officers (CEOs) of various companies face in the hospitality business -- from managing costs to developing synergies across multi-format, multi-location functions in the business.

At present, a hotel needs almost 80-100 licences before it starts its operations in India. Almost all CEOs interviewed voiced the need for "effective single window clearance" to make the process smooth and avoid the untimely delays.

It said domestic tourism would add to the growth of the hopitality sector in India.

"The growth potential of the hospitality sector in India is well accepted. However, the realisation of sustainable growth depends on expanding infrastructure, managing costs as well as talent better and providing for tax incentivised development," said Timmy S. Kandhari, leader, Hospitality and Leisure Practice, PwC India.