The urban development ministry has been directed to allow conversion of motels in and around NCR into hotels on payment of conversion charges.
The tourism ministry proposal is bound to have a far-reaching effect on the hotel shortage faced by the Capital ahead of the Commonwealth Games and will unleash 10,000 more rooms in Delhi, solving the hotel shortage problem by nearly 30%.
The motels included in the proposal number around 30-40 and are those that occupy a hectare of land.
In the case of motels, the floor area ratio is 15, while in a hotel it is 150.
“Such a step will unleash the potential of the current land usage and improve the hotel shortage situation by 30%. At present, India has around 1.1 lakh hotel rooms, which is 10% of what major cities around the world have,” says Ankur Bhatia, MD, Amadeus India.
In fact, industry experts feel that even deals like the Rs 611 crore purchase of a three-acre plot by hospitality major Leela Group on Africa Avenue near Chanakyapuri to build a five-star hotel, will not suffice.
“The deal might be huge, but the group will have to price the rooms at Rs 26,000 per night to actually start generating profits due to the huge investment in land that it has made,” says Bhatia.
Earlier, the government had allowed that areas within a 4 km radius around railway stations, airports and bus stops be converted into hotels.
The shortage of hotel rooms is pegged at 20,000 in Delhi, 25,000 in Mumbai, 10,000 each in Kolkata and Chennai and the rest 30,000 spread over other cities.