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Ownership of ITDC Hotels to be Transferred Back to States

India Tourism Development Corporation hotels running in losses, the government has decided to transfer some of them back to the host states.

Published: 14th February 2016 07:38 AM  |   Last Updated: 14th February 2016 08:42 AM   |  A+A-

With most of the India Tourism Development Corporation (ITDC) hotels running in losses, the government has decided to transfer some of them back to the host states. In a first such move, the tourism ministry—which jointly owns these hotels along with the state governments—has identified Hotel Lake View Ashok, Bhopal; Hotel Lalitha Mahal Palace, Mysore; Hotel Jaipur Ashok, Jaipur; and Hotel Brahmaputra Ashok, Guwahati, for shifting their full ownership to the states.

OWNERSHIP.jpgSources said the transfer of these hotels to the state governments is being done to optimise revenue from each property as most of them have been running in loses. Hotel Jaipur Ashok incurred losses of Rs 9.59 crore while the amount was Rs 2.66 crore for Hotel Lalitha Mahal Palace during 2011-2014. Hotel Lake View Ashok, Bhopal, however, made profits of Rs 2.62 crore during the same period.

The government said these hotels have been running in losses for due to more availability of rooms in the market, high wage cost, weakening global economy and lower fares due to high competition.

ITDC has a network of eight Ashok Group of Hotels, six joint venture hotels, one restaurant and two tourist lodges, 12 transport units and duty-free shops.

The hotels, which are being sought to be transferred to the states, are operated by the joint venture company with ITDC holding 51 per cent equity and states holding 49 per cent.

The tourism ministry is engaging evaluators to assess the value of the these properties. This will be done on the basis of inventory owned by each of these hotels. The state governments are expected to pay the agreed amount to the ITDC for transfer of majority stake to the former.



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