In an insightful address to a gathering of government representatives, industry insiders and senior bureaucrats, at the inauguration ceremony of the third Odisha Tourism Conclave, held in Bhubaneshwar, Jitendra Kumar Mohanty, Chairman and Managing Director, Swosti Hotel Group made a strong pitch for a long-term tourism policy for steady gains. He batted for expanding the ambit of state’s tourism products by targeting segments like fashion and cinema tourism, and the MICE segment, to boost domestic and international numbers. He also advocated constructing a world-class convention centre, beside looking at ensuring a minimum of three-year term for senior bureaucrats involved in the tourism department to maintain continuity on the policy front. Excerpts from his address:
The new state tourism policy has many firsts for the industry
During our first Tourism Conclave, held three years ago, we had made certain recommendations and suggestions to the state government – which resulted in producing one of the most progressive and dynamic tourism policies in the country. It was published in 2016. We are sure that it would be a great advantage for entrepreneurs and industrialists wishing to invest in the field of tourism and the increase in capacity in the hotel industry. Once we have good hotels and international chains spread over the beautiful locations in the state – the Oberoi has got one beautiful hotel in Bhubaneshwar, we urge them to come up with more such beautiful hotels in the state – footfalls into the state would definitely take a leap forward.
Beside the hotel industry, in the new state Tourism Policy, the state government is giving a number of incentives for building of water-sport infrastructure, boating, cruising, water-surfing and eco-tourism. The state government is also giving up to 20% capital investment subsidy to tented accommodation which has been given for the first time by any state in the country. Also, the state has budgeted 5% interest subsidy, for the first time in India, up to a limit of rupees one Crore to hoteliers who want to invest in the MSME and tourism sector. If you are getting a loan of 14%, I think 5% interest subsidy is great for us. There is 100% reimbursement of VAT for a period of seven years, 100% exemption form entertainment tax, exemption from electricity duty for five years, reimbursement of entry tax for new hotel projects, 75% reimbursement for male and 100% reimbursement for female workers on payment of ESIC and EPF for a period of five years. No state has ever given such an incentive. Training subsidy has been introduced for the first time – rupees 2000 for each employee for new hotels. There is 75% exemption on registration charges. For tourist transport coaches, there is a reimbursement of up to rupees 75,000 for participation in overseas fairs and festivals.
At the second Odisha Tourism Conclave, we have invited, not only people form the travel trade, but also important members from CII, FICCI, TAAI, Utkal Chamber of Commerce and Industry – whose suggestions are important for taking Odisha Tourism forward. These members are bug industrialists, like The Chairman of NALCO is with us. These members can also be considered as prospective investors in the field of tourism. Every hotel room that gets added gives direct employment to three people and indirect employment to additional ten.
Growth of tourism will take pressure off mineral resources in the state
Odisha is endowed with vast tourism potential and can be a tourist destination far superior to most of the other states which have progressed fast in the tourism sector, and this can happen only if we focus our energies, of government and the private sector in developing the tourism sector. If tourism is developed, the drain of mineral resources of the state can be avoided. There is no doubt that Odisha is rich with its mineral resources below the soil, but Odisha is richer with its tourism potential above the soil.
Today, India gets about eight million foreign tourists which is just 0.7% percent of the world market, and Odisha gets the lowest with about 7000 to 10000 international visitors excluding expats and other business visits who come on various corporate activities. When we compare the tourist inflow in to India with smaller countries, Singapore gets around eleven million tourists, while Thailand gets twenty million and Hong Kong receives thirty million tourists. When we look at larger countries like China, it gets fifty million foreign tourists and USA gets seventy million foreign tourists. As far as domestic sectors are concerned, India’s domestic tourism number is one billion and seven hundred million travellers, compared to our neighbouring country China whose domestic movement is just double of India’s number – which is two and half billion tourists.
The theme we have given to the conclave this year is ‘tourism to be the driving force of the future economy’. We reiterate that tourism can be the largest employment generator and booster for India’s GDP and also having the richest tourism potential in India. Odisha can become the biggest gainer, if tourism is really taken seriously. As per a report by NITI Aayog, around five crore people are already engaged, directly and indirectly in the field of tourism and accounts for a GDP of rupees six to seven lakh crores. The way tourism industry is growing, the figure is likely to double in the next five years, and Odisha should not lose out.
Bring hotels under the purview of infrastructure
What we propose that the government should declare hotels under infrastructure and industry status to increase the room capacity in the hotel industry which, in turn, will have a direct impact on the growth of the tourism sector. India has 0.15 billion classified hotel rooms, compared to our biggest neighbouring country, China which has 2.5 billion classified hotel rooms. With international tourist arrivals more than 55 million, compared to India which gets less than eight million tourists, the hotel industry in China is doing much better than hotels in India.
Hotel industry is a highly capital-intensive industry and the breakeven comes after eight years, on a minimum period. Large amount of capital investment is required and a long-term repayment schedule is the only answer for the growth of the hotel industry in the state. The present mode of financing is a major drawback for the hotel industry and other than leading hotel chains, independent entrepreneurs who take loan, they automatically become NPAs and defaulters, because eight years repayment period is too short. For hotels, we need at least fourteen to eighteen years of repayment schedule, because this is a capital-intensive industry.
Odisha needs a convention centre to attract international MICE footfalls
One suggestion of the state government, since we have the Principal Secretary here, I would urge her to take our suggestions a little seriously, is building a convention centre. There is a huge market to tap higher value, i.e. convention and meetings segment, and Odisha badly needs a global standard convention centre which can create tremendous intellectual goodwill across different industries and countries. Getting global conventions and meetings in to India in various technologies – science, engineering, medicine etc. – can put Odisha on the world map.
The government, a few years ago, announced that a World Trade Centre would come up, with a global standard convention centre, but it is already three years and not much progress has been made. If you compare Odisha with the neighbouring state, Andhra Pradesh, they have got an international standard convention centre which attracts major international conferences and that helps attract a lot of international traffic to the state.
Target film and fashion industry. Promote Odisha as a cinema tourism destination
Another segment which has recently come up is fashion and film tourism. Today, garment business is a big business and international companies are opening up shops in India. There are big fashion shows happening everywhere, and with fashion shows you have very high-end international traffic. It is the same with film tourism. If we can promote Odisha as a film producing destination, our rich and scenic places, Odisha can become a hub for big film productions. I am happy to share that the state government has already decided to give a subsidy of rupees ten lakhs to producers producing movies in Odisha, but nobody has approached the state government for availing this subsidy.
Another suggestion that we would like to put up is that Odisha must also start a Bird Festival. Chilika Lake which is a paradise for millions of migratory birds, during the winter season, can attract a large segment of bird lovers across the globe, if we can start a festival to attract bird lovers. I would like to urge the state government to kindly look into this seriously.
Odisha is very rich in culture and heritage – Odishi sarees, handicrafts, handlooms, forms of Odishi dances – are things that we all know and take pride in. but these need to be highlighted, nationally and internationally, to attract quality footfalls in to our state.
Too many changes at the executive level deters continuous policy implementation
Lastly, I would also like to mention in front of His Excellency that too many frequent changes in the tourism department is one of the major hindrances for continuous growth of tourism. We have too many changes at the Secretary and Director level which is pulling down the growth of the tourism sector. At least, a three-year term is necessary for continuous tourist growth. Otherwise, government must form a taskforce to implement a long-term tourism policy to maintain continuity. Unless, there is a strong taskforce, I do not think frequent changes will help for our growth.