If an aim of hosting the 2010 Commonwealth Games is to showcase Delhi as a modern city with the best contemporary infrastructure, things don’t quite seem to be going to plan.
A key project the building of new hotels to accommodate the 1 lakh-plus tourists who are expected seems to be floundering.
In the past six months, Delhi Development Authority (DDA) has managed to sell just nine of the 23 plots for proposed hotels it put up for auction. The DDA has identified 26 such sites belonging to it, hotels on which are supposed to provide 7,000 rooms. Delhi currently has 10,000 approved rooms in the star and budget categories. The International Olympic Association says we will need 40,000 rooms to meet tourist requirements during the Games.
Of the 19 plots put up for auction in the past two days, only three have been sold. Those familiar with the hospitality industry blame poor locations and high reserve prices.
One of the nine plots on auction on Tuesday, 28, 268 sq m in size, had a reserve price of Rs. 564 crore. “It is so high that the cost of building each room will be Rs. 65-70 lakh,” said Sunil Rao, hospitality and leisure division, Tramell Crow Meghraj. “This means the hotelier will have to charge an exorbitant tariff to recover his investment. It will not work.”
Rajendra Kumar, director, Ambassador Hotel, said if the locations were not attractive, the hotel projects would not take off. “Take a location like Anand Vihar,” he said. “There is hardly any business activity there. How will a developer sustain an expensive hotel there?”