Privatize Tourism

Public Private Partnerships (PPP) will boost the industry

Junaid Azim Mattu
Publish Date: Oct 11 2012 12:00PM

The J&K Tourism Development Corporation (JKTDC) and the J&K Tourism Department own and operate hundreds of Tourist Huts in the State at some of the most popular tourist destinations including Gulmarg and Pahalgam. The collective worth of these properties runs into thousands of crores. Yet, the annual profits that the government rakes in from this extensive hospitality infrastructure is dismal. The JKTDC and Tourism Department earns annually from all its huts what a single medium range private boutique hotel in Srinagar makes in a year.
Most of these tourist huts are often utilized free of cost by politicians, ministers, government officers, their relatives and families. The huts, as is with government run facilities, lack adequate and modern facilities and trained hospitality staff - that is where they are still operating as tourist huts. At other prime places, such as Chashma-e-Shahi in Srinagar, the huts are allotted to ministers and bureaucrats as official residences.
Our State has been witnessing a growing acute shortage of hotel accomodation with every new tourism season, thanks to the obstructionist policy of successive governments that makes it almost impossible to construct a hotel in the State legally. Almost all new hotels that have come up in the State have come up either after hefty bribes have been paid to officers in SMC and SDA (when it comes to Srinagar) or ministers and local legislators in whose constituencies our tourism destinations lie. Touching an inflow of around 15 lakh tourists a year, had brave entrepreneurs not violated archaic and obstructionist laws, Kashmir wouldn't be able to cater to more than 5% of this inflow!
So, besides coming up with a comprehensive system of 5 year plans that aims at capacity expansion in the Private Tourism Industry with positive policies, the State Government needs to disinvest completely from the tourism and hospitality infrastructure sector. Such a disinvestment would serve many purposes.
1. The tourist huts can be leased out to unemployed and educated youth on a Public Private Partnership (PPP) model where they'd be required (as a part of the partnership module) to adhere to the highest standards of quality and service in the refurbishment and operation of these huts. This would in turn create significant economic value, add to government tax revenue and help in dealing with the State's unemployment issue.
2. The government, as a part of such PPP initiatives, would reduce its operational and wage expenditure from these huts as the existing staff would be taken in and employed by the private operators.
3. Adding to the capacity of these huts and leasing them out to private players would significantly increase the number of 'hotel rooms' in our tourism portfolio.
4. These huts can be developed on a diverse affordability and luxury menu offering both reasonable and luxury Swiss chalet type accommodation.
5. This privatization would also be fair as opposed to the existence of government run huts that interfere into the free-market dynamics in the industry at great harm to private hoteliers. An affluent tourist or local who visits such tourist destinations should not have an option of free-loading in a government tourist hut at a competitive disadvantage to the private hotels in the area.
6. The very quality of these huts would be drastically increased without any capital expenditure from the government.
7. The one-time revenue earned through such a privatization initiative - which can run into thousands of crores - can be utilized by the JKTDC and Tourism Department to develop public infrastructure - such as roads, public toilets, highway rest areas and assistance booths in and around these tourist destinations. The privatization revenue can also be used to introduce new destinations on the tourism map.
PPP initiatives don't have to be restricted to tourist huts but can also, for instance, be adopted in the Gulmarg Gondola and Cable Car Projects. It's not the role of a government to either operate tourist huts or cable-cars. Over capitalized and buried under a weight of gross over-staffing - the true economic potential of such projects is and will always remain capped under government hold.
We need to innovate to solve our infrastructural and economic problems including unemployment. Rather than useless, nonsensical employment "schemes" and slogans, the State government should put its faith in established economic principles and practices to ease J&K out of a two decade long economic rot.
Foreign tours by bureaucrats in the Tourism department or Tourism Ministers for that matter is plain, paid-for sight-seeing and nothing else. Forget about attracting high-end foreign tourists. Do you have the infrastructure to cater to their needs? It's more important to first focus on the State of our tourism related infrastructure. Once our State has adequate and quality tourism and public infrastructure - including good hospitals, roads, electricity and convenience inns - tourists will come and come running. They won't wait for bureaucrats from our State to go on melas to invite them.

(Junaid Azim Mattu is the Srinagar District President of Peoples' Conference. Views are personal. Email - junaid. msu@gmail.com)


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