Lok Sabha Question No. 1321 (UNSTARRED), answered on 2019-02-11
Subject: Aims and Objectives for Setting up of ITDC
Ministry: TOURISM
Asked by: SUDHEER GUPTA, ASHOK SHANKARRAO CHAVAN, VIJAY KUMAR S.R., GAJANAN CHANDRAKANT KIRTIKAR, KUNWAR HARIBANSH SINGH, S. RAJENDRAN, T. RADHAKRISHNAN

## GOVERNMENT OF INDIA MINISTRY OF TOURISM

## LOK SABHA UNSTARRED QUESTION NO.1321 ANSWERED ON 11.02.2019

## AIMS AND OBJECTIVES FOR SETTING UP OF ITDC

## 1321. SHRI SUDHEER GUPTA:

SHRI ASHOK SHANKARRAO CHAVAN:

SHRI S.R. VIJAYAKUMAR:

SHRI GAJANAN KIRTIKAR:

KUNWAR HARIBANSH SINGH:

SHRI S. RAJENDRAN:

SHRI T. RADHAKRISHNAN:

Will the Minister of TOURISM be pleased to state:

- (a) the main aims and objectives for setting up of India Tourism Development Corporation (ITDC);
- (b) the details of hotels, beach resorts, travellers lodges/restaurants under ITDC, location-wise, State/UT-wise;
- (c) whether most of ITDC hotels, beach resorts, travellers lodges/restaurants  are  running  in  huge  losses  and  if  so,  the details thereof during each of the last three years along with the reasons for the same;
- (d) whether the Government has directed ITDC to transfer some of its  hotels,  beach  resorts,  travellers  lodges/restaurants  to  the State Governments or joint leasing with the State Government and  if so, the details thereof and  the  reasons  therefor, property-wise, State/UT-wise; and
- (e) the  quantum  of  income  generated  along  with  the  time  by which  the  said  process  is  likely  to  be  completed,  State/UTwise?

## ANSWER

MINISTER OF STATE FOR TOURISM (INDEPENDENT CHARGE) (SHRI K.J. ALPHONS)

(a): ITDC came into existence in October 1966 with the following broad objectives:

- (i) To construct, take over and manage existing hotels and market hotels, Beach Resorts, Travellers' Lodges/Restaurants
- (ii) To provide transport, entertainment, shopping and conventional services
- (iii) To produce, distribute, tourist publicity material
- (iv) To  render  consultancy  -  cum  -  managerial  services  in India and abroad
- (v) To carry on the business as Full-Fledged Money Changers (FFMC), restricted money changers etc.
- (vi) To  provide  innovative,  dependable  and  value  for  money solutions  to  the  needs  of  tourism  development  and engineering industry including providing consultancy and project implementation.

## (b): At present, ITDC is running the following hotels:

|   S. No. | Name of Hotel          | State / UT               |
|----------|------------------------|--------------------------|
|        1 | The Ashok Hotel        | New Delhi                |
|        2 | Samrat Hotel           | New Delhi                |
|        3 | Hotel Jammu Ashok      | Jammu, Jammu and Kashmir |
|        4 | Hotel Patliputra Ashok | Patna , Bihar            |
|        5 | Hotel Kalinga Ashok    | Bhubaneswar, Orissa      |

## Joint Venture Hotels of ITDC are as follows:

|   S. No. | Name of Hotel                                           | State / UT        |
|----------|---------------------------------------------------------|-------------------|
|        1 | Hotel Ranchi Ashok (Presently operations are closed)    | Ranchi, Jharkhand |
|        2 | The Ashok Beach Resort                                  | Puducherry        |
|        3 | Hotel Nilachal Ashok (Operations are closed since 2004) | Puri, Odisha      |

At present, ITDC is running the following Restaurant:

|   S. No. | Name of Restaurant   | State / UT          |
|----------|----------------------|---------------------|
|        1 | Taj Restaurant       | Agra, Uttar Pradesh |

## (c): Details of the same are at Annexure - 1.

(d): As per its Disinvestment Policy, the Government is disinvesting the hotels and properties of ITDC through leasing out or transferring the property to the concerned State Governments/Ministry (except Ashok Hotel and Samrat Hotel, New

Delhi). The policy has been formulated keeping in view that running and  managing  hotels  on  professional  lines is not the job of Government or its entities. Details of the same are at Annexure - 2.

(e):  Details  of  the  amounts  received  by  ITDC  on  account  of hotels/properties  disinvested  are  at  Annexure-3.  The  process  of disinvestment  of  the  following  hotels  is  ongoing  and  efforts  are being made  to  complete  the same,  in consultation with the respective State Governments:

1. Hotel Patliputra Ashok, Patna, Bihar.
2. Hotel Pondicherry Ashok, Puducherry (UT) (Joint Leasing).
3. Hotel Kalinga Ashok, Bhubaneswar, Odisha (O&M Contract).
4. Incomplete Project of Anandpur Sahib, Punjab
5. Hotel Ranchi Ashok, Ranchi, Jharkhand
6. Hotel Nilachal Ashok, Puri, Odisha (Joint Leasing. Matter is sub-judice in the Hon'ble Supreme Court).

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## ANNEXURE - 1

STATEMENT  IN REPLY TO PART (c)  OF  LOK  SABHA  UNSTARRED QUESTION  NO.1321  ANSWERED  ON  11.02.2019  REGARDING  AIMS  AND OBJECTIVES FOR SETTING UP OF ITDC.

Hotel 'The Ashok' , Samrat and Taj Restaurant are in profit.

Financial  Performance  of  Hotel  &  Catering  Units  currently  managed  by ITDC and are Loss making are as follows:

## Amount in Rs. Lakh

| S.N.   | Particulars             | 2017-18 (Ind AS)   | 2017-18 (Ind AS)   | 2016-17 (Ind AS)   | 2016-17 (Ind AS)   | 2015-16 (GAAP)   | 2015-16 (GAAP)   |
|--------|-------------------------|--------------------|--------------------|--------------------|--------------------|------------------|------------------|
|        | Hotels & Catering Units | Turnover           | Net Profit         | Turnover           | Net Profit         | Turnover         | Net Profit       |
| 1      | Jammu Ashok             | 163.65             | -283.14            | 212.48             | -170.69            | 238.58           | -158.61          |
| 2      | Western Court           | 43.36              | -63.66             | 35.39              | -57.73             | 29.41            | -55.23           |
| 3      | Kalinga Ashok           | 444.99             | -277.29            | 483.27             | -105.17            | 471.38           | -173.77          |
| 4      | Patliputra Ashok        | 783.03             | -67.45             | 877.39             | 67.01              | 1,033.54         | 247.44           |
| Total  | Total                   | 1,435.04           | -691.54            | 1,608.53           | -266.58            | 1,772.91         | -140.16          |

## Reasons for losses :

- 1) Hotel Patliputra Ashok made Net Profits during 2016-17 and 201516 but made an operational loss of Rs.37 Lakhs during Financial Year 2017-18. Due to the decision of handing over of the hotel to the State Government, the same has acted as a dampener to the business.
- 2) The land lease of Hotel Jammu Ashok which expired in January, 2010,  has  not  been  renewed  by  the  State  Government  and  the same has been under process. Due to non renewal of the lease, the  refurbishment  and  upgradation  of  the  hotel  could  not  be undertaken.  The  present  tourism  condition  of  the  J&K  State where  there  is  very  low  inflow  of  tourists  has  also  led  to  low business for the hotel. The hotel was earlier also a transit point for  pilgrims  on  their  way  to  Mata  Vaishno  Devi  Shrine  and    the development of Katra and direct  connectivity  had  an  impact  on the business.
- 3) A lot of efforts  have  been  made  to  improve  the financial performance  of  the  Hotel  Kalinga  Ashok.  The  occupancy  of  the hotel  has  seen  a  rise  in  recent  years.  Due  to  the  decision  of offering the hotel on O&M contract, the same has been acting as dampener for the business.

## The other reasons are as below:

- 4) Stiff Competition from new hotels offering ultra modern facilities.
- 5) Low  tariff  of  services  offered  in  order  to  sell  the  products  and services and sustain the competition.
- 6) ITDC  wages  of  the  employees  are  as  per  the  Government guidelines which are higher than the Industry norms.
- 7) No major renovation has been done in hotels in view of disinvestment decisions.

## Financial Performance of Hotels under Joint Venture are as follows:

## Amount in Rs. Lakh

| S.N.   | Particulars             | 2017-18   | 2017-18    | 2016-17   | 2016-17    | 2015-16   | 2015-16    |
|--------|-------------------------|-----------|------------|-----------|------------|-----------|------------|
|        | Hotels & Catering Units | Turnover  | Net Profit | Turnover  | Net Profit | Turnover  | Net Profit |
| 1      | Ranchi Ashok            | 100.32    | -201.05    | 81.26     | -211.08    | 147.61    | -168.12    |
| 2      | Pondicherry Ashok       | 529.27    | 2.40       | 548.47    | 42.70      | 390.92    | -21.17     |
| Total  | Total                   | 629.59    | -198.65    | 629.73    | -176.15    | 538.53    | -189.29    |

Further  there  is  one  more  Joint  Venture  Hotel  named  Hotel Nilachal Ashok, Puri which is closed since 2004.

## Reasons for losses :

- 1)  Hotel  Ranchi  Ashok  was  reeling  under  losses  due  to  multiple reasons,  but  primarily  due  to  dilapidated  condition  of  the  hotel's building  /  basic  guest  facilities  viz  rooms  and  F&B  outlets  etc.

Operations  of  the  Hotel  have  been  closed  w.e.f.  29.03.2018  due  to continuous losses. 2) During 2015-16, there was severe flood in source market - Chennai and Pondicherry affecting two months of sales. Further introduction of

GST affected the Corporate Market segment during 2017-18.

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STATEMENT  IN REPLY TO PART (d)  OF  LOK  SABHA  UNSTARRED QUESTION  NO.1321  ANSWERED  ON  11.02.2019  REGARDING  AIMS  AND OBJECTIVES FOR SETTING UP OF ITDC.

## Status of Disinvestment

No. of Hotels handed over

: 8

## To State Governments

- (i)   Hotel Lake View Ashok, Bhopal, Madhya Pradesh
- (ii)   Hotel Brahmaputra Ashok, Guwahati, Assam
- (iii)  Hotel Bharatpur Ashok, Bharatpur, Rajasthan
- (iv)  Hotel Jaipur Ashok,  Jaipur, Rajasthan
- (v)   Incomplete Project of Gulmarg Ashok, Gulmarg, J&K
- (vi)  Hotel Donyi Polo Ashok, Itanagar, Arunachal Pradesh
- (vii)  Hotel Lalitha Mahal Palace, Mysore, Karnataka

## To Ministry of Urban Development

(viii) Hotel Janpath, New Delhi

No. of Hotels decided to be handed over to the State Govt.:  2

- (ix) Hotel Patliputra Ashok, Patna, Bihar (MoU signed)
- (x) Incomplete Project of Anandpur Sahib, Punjab

Hotels for Joint Leasing

(xi) Hotel Pondicherry Ashok, Puducherry (UT)

Hotels for O & M Contract

: 1

: 1

(xii)  Hotel Kalinga Ashok, Bhubaneswar, Odisha

Hotels for transferring equity stake

(xiii)  Hotel Ranchi Ashok, Ranchi, Jharkhand

No. of Hotels where disinvestment proceedings have been stayed due to order of Hon'ble Supreme Court : 1

(xiv)   Hotel Nilachal Ashok, Puri, Odisha

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: 1

## ANNEXURE - 3

STATEMENT  IN REPLY TO PART (e)  OF  LOK  SABHA  UNSTARRED QUESTION  NO.1321  ANSWERED  ON  11.02.2019  REGARDING  AIMS  AND OBJECTIVES FOR SETTING UP OF ITDC.

## Receipts from the Disinvestment

|   S. No. | Name of Property                                                                     | Amount received by ITDC   |
|----------|--------------------------------------------------------------------------------------|---------------------------|
|        1 | Hotel Janpath, New Delhi                                                             | Amount to be finalized    |
|        2 | Hotel Jaipur Ashok, Jaipur                                                           | Rs.14 Crore               |
|        3 | 51% Equity stake in MP Ashok Hotel Corporation Ltd. (Hotel Lake View Ashok)          | Rs.12.59 Crore            |
|        4 | 51% Equity stake in Assam Ashok Hotel Corporation Ltd. (Hotel Brahmaputra Ashok)     | Rs.2.14 Crore             |
|        5 | 51% Equity stake in Donyi Polo Ashok Hotel Corporation Ltd. (Hotel Donyi Polo Ashok) | Rs.1.98 Crore             |
|        6 | Hotel Bharatpur Ashok                                                                | Nil                       |
|        7 | Incomplete Project of Hotel Gulmarg Ashok                                            | Nil                       |
|        8 | Hotel Lalitha Mahal Palace, Mysore                                                   | Rs.7.45 Crore             |

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