The sources in the corporation maintain that the period from April to June is generally a lean period but the continuous decline in the profitability during the last two years of the ITDC has raised many eyebrows in the tourism ministry. The company which made a net profit of Rs 2.80 lakh last year turned into an ailing organisation during the first quarter itself.The reasons are varied any many. But the top of all these is the unplanned approach and lack of cost control.

The organisation which had reserves and surplus to the tune of Rs 185.7 crore during 1997-98 andregistered a profits of Rs 79 crore for the same period suddenly has crashed on the profit front.

The cost of operations has gone up by 8 to 10 per cent during the last two years. The sources divulged that the sales and marketing wing of the public sector undertaking has shown a poor performance. The directorate of tourism which had 23 overseas tourist offices supposed to sell ITDC but they failed to sell a single room during the period.

INSIGHT:

Firm worst affected by slowdown in industry

The last twelve months have been difficult for the hospitality industry. The slowdown in the economy and a discouraging growth in tourist arrivals have taken a toll. Hence, most players have been posting relatively poor results. Giants like Indian hotels and East India Hotels have also posted a negative growth in the quarter ended June 1999. However, ITDC seems to have been one of the worst affected and its results are particularly alarming. Though other hotel companies have been able to keepthemselves in the black by adopting suitable strategies like an increased thrust on marketing and advertising, changing the marketing thrust to appeal to leisure and holiday travellers, and by offering steep discounts on room-rents to keep occupancy levels high, ITDC has clearly failed to do so. Clearly, it is not the government's cup of tea to run hotels.

--Sarad Saraf