ITDC plans consolidation of business, eyes PPP

By : Ruchika Chitravanshi
Last Updated: Sun, Feb 26, 2012 20:00 hrs

The India Tourism Develop-ment Corporation (ITDC) plans to maximise revenue by leveraging resources of its existing hotels through public-private partnership (PPP) and consolidation of existing businesses.

This is part of its five-year roadmap for the upgradation and renovation of its hotel properties that operate under the brand name The Ashok, besides other verticals such as Ashok Travel & Tours, Ashok Events and Ashok Institute of Hospitality and Tourism Management.

Experts feel the landscape of the hospitality business has changed with international chains now making their presence strong in the country. “Ashok was a brand back in the day. Now it has to match pace with competition,” said Chintan Patel, director-real estate and hospitality, Ernst & Young. “They have good properties in great locations. Hotel can be managed much more professionally by a private sector company while government can continue to own the property.”

The advent of international hotel chains in the country has also sensitised the government-owned company to upgrade its products through renovation and refurbishment. “The government may also want to sell its non-core businesses when it is talking of consolidation,” adds Patel. “The infrastructure is ready and government can step back now and let the businesses run in a profitable way.”

The task force constituted by the department of public enterprises for finalisation of a memorandum of understanding for 2011-12 between the ministry of tourism and ITDC had observed that the share capital of the corporation is not adequate to carry out major capital expenditures and capital ventures. The estimated requirement of funds during the coming 12th Plan would be approximately Rs 250 crore, according to the tourism ministry’s working group report on the 12th Plan (2012-17). ITDC has also proposed to undertake detailed manpower study in all its units and implement recommendations in order to rationalise human resources deployment besides improving its brand image through enhanced public relations.

ITDC was set up in October 1966 with the amalgamation of India Tourism Hotel Corporation, India Tourism Corporation and India Tourism Transport Undertaking. It was incorporated with the objective of developing and expanding tourism infrastructure in the country and thereby promoting India as a tourist destination. Later, the scope of operation of ITDC was enlarged by merging Ashok Hotels Ltd and Janpath Hotels (consisting of Janpath, Lodhi and Ranjit Group of Hotels) in March 1970.

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