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Tuesday, 21 April, 2015, 16 : 00 PM [IST]

D is for Development

Polish it, Don’t Junk it!
Dr. Mahesh Sharma’s statement gladdened our hearts.

Speaking of the ITDC he reportedly said “We will try to revive hotels with some management problems ... Disinvestment should be the last option. An entrepreneur’s approach and vigorous marketing is required to take ITDC to new heights.”

Before the bureaucrats ruined Air India, that entrepreneurial genius, JRD Tata, was its boss. Then, its iconic Maharaja-on-a-flying-carpet captured the imagination of the world. Such inspired campaigns are created by top-of-the market professionals who are also employed by major private hotel chains. If the ITDC is to compete with the best it has to be promoted by the best.

The ITDC’s present image of a sarkari hotel chain harms it. Its operational staff are excellent. They handle in-house banquets, and those in Rashtrapati Bhavan, the PM’s House, the External Affairs palace at Hyderabad House and at international events like the Cannes Film Festival, with flawless efficiency. But its administration is a Kafkaesque nightmare of delay, dithering and a risk-averse babudom. This can be cleared up by gradually appointing senior managers on contract, giving them the financial and administrative powers matching those in the private sector, and protecting them from the rent-seeking threats and influence peddling of netas and babus. Don’t say “The rules don’t allow it!”. In Germany the Prime Minister said “Rules can be changed” to facilitate investment in India. Surely the ITDC’s rules can be revised to be in sync with our 21st century Make in India stance? If this is done, the whole work-culture of the ITDC will change.

It must also re-discover its raison d’etre, the main reason for its existence, The TD in ITDC stands for Tourism Development. It’s wonderful that its turnover has, reportedly, increased by 6.57% to about Rs. 470 crore, its net profit jumped by 118% to Rs. 11.93 crore, its profit after tax leapt by 214% to 9.42 crore so that it could hand over a 5% interim dividend cheque of Rs 3.73 crore to the Minister. But it was not created only to make money. The ITDC’s properties were also to be centres of excellence showcasing Indian arts, crafts, cuisine, and our legendary hospitality. In other words it was set up to be a pioneer, going where the more timid commercial ventures were too scared to go. Its Kovalam hotel pioneered our beach tourism of international standards. Its Gir property set benchmarks for wildlife tourism.

Sadly, somewhere down the line, the ITDC was compelled to compete with private, profit-based, hotel chains. That’s where it went wrong. A state-owned corporation is constrained by its social obligations, by the checks and balances demanded by millions of voters, represented by tens of thousands of elected representatives and probing bureaucrats armed with a myriad rules, regulations, and precedences. Something had to give, and it did.

Like a great fire sweeping through a tangled forest, a wave of disinvestment trimmed the 33 hotels of the ITDC to a small family of just 16: 8 owned by the ITDC and the Ashok, 6 as joint ventures and 2 managed by the Ashok. It was a great blow to the Ashok group’s pan-India image, but it was also a long overdue wake-up call. It led to a leaner, fitter, body more attuned to its essential, tourism development, role in 21st century India.

The government has two choices. It can either treat the ITDC as old family silver or sell it to boost the state kitty. Or it can polish it and restore it to its original glory as a pioneering centre of tourism excellence. India has to equip young people with the skills needed to staff the hundreds of hotels which must blossom all over India if we are to achieve our true potential. The ambitious Hunar se Rozgar scheme run by the Ministry has already trained 10,000 of our youth in technical and maintenance jobs for all types of accommodation meant for tourists. Consequently, the ITDC hotels should set the highest standards of operational and administrative efficiency as benchmarks for the trainees, the future hoteliers of India. These hotels must also, necessarily, make a profit. They must prove that a well run hotel does not need government financial oxygen the way the babu-neta stifled AI does. Offer the best and the world will pay your price without bargaining! Happily, the government seems to be waking up to the fact that a state-owned hotel can be run as a high-profile state-of-the art hotel if it sheds its bureaucratic baggage.

Recently, every hotel in Delhi would have been delighted to host the PM’s attention-grabbing banquet for senior judges and chief ministers. The fact that the Ashok was chosen could be a pointer to its rediscovered exemplary role in tourism development.

That’s also a great feather in the cap of the Tourism Minister.

As for the Ashok Hotels’ continuing role as centres of excellence, we need to appoint their GMs on contracts at private-sector salaries, powers and perks. Most importantly, they must have the powers, both financial and administrative, particularly the authority to transfer non-performers to less sensitive billets. This single step would result in a sea change. Everyone would then strive to deliver the goods and the seniors would aspire to this high contractual position. This aspirational drive would have a sharp trickle-down effect. Did we hear anyone?
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Rajiv Nair 2015-05-19 11:13:48
Dear Mr. Gantzer, Your Insight into ITDC seems to be better than most . It was almost 15 years when more than 50% of its hotel were sold by this very government(BJP). making ITDC lose its competitive edge wherein ITDC as "India Host to the World "could offer a traveller a affordable and clean room at every nook and corner of India. Today ITDC trains approximately 15000 people every year as part of HSRT programme of MOT and these very boys and girls work for the private sector. An employee in ITDC on an average gets aroundRs 40000 per month and whereas his counterpart in the private industry gets abount 20000. Wagebill to employees account for more than 55% of ITDC revenue again dictated by the Goverment rules - works eight years - again govt rules - cannot be transferred - again govt rules . Each and every decision is questioned through RTI - again govt rule. Every employee is a union member with some political connection. ITDC is one the most vibrant companies and can still
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