This story is from October 27, 2006

Tour operators come together to set up hotels

Parul Chhaparia / TNN / Oct 27, 2006, 00:35 IST

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Tour operators are putting together plans to cash in on the widening demand-supply gap in the hospitality industry.

Tour operators come together to set up hotels

NEW DELHI: Tour operators are putting together plans to cash in on the widening demand-supply gap in the hospitality industry. Their plan: To set up a new chain of hotels across India.
The tour operators — under the aegis of Indian Association of Tour Operators (IATO) — are planning to build 50 budget hotels in the country. The association has already initiated talks with governments of Madhya Pradesh, Uttar Pradesh, Haryana and Rajasthan seeking land at a concessional price or on long-term lease.
"The decision was taken at our annual convention at Jaipur.We plan to build 50 hotels in different states before the Commonwealth Games in 2010," said IATO president Subash Goyal.
The members are going to chip in for funding this ambitious project. "We have around 1,500 tour operators and travel agents as members. We'll issue a circular before asking them to pool in resources. If required, we can also go to the financial institutions to raise some funds," Goyal said.

Though the location for the budget hotels are yet to be finalised, the properties are expected to come up in the suburbs, he said.
The decision to enter the hospitality industry comes at a time when the tour operators and travel agents are reeling under low margins in the ticketing business. Airlines have been cutting margins for operators, with some carriers even advocating a zero-commission regime. This has forced many operators to look at alternate revenue streams.
"With our hotels, we can directly deal with tourists and pass on the benefits to the operators," said IATO executive director G Kanjilal.

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