Mismanaged assets

A heavy influx of tourists has exposed the shortage of hotel rooms in the valley, but trade insiders say that the problem could be overcome instantly if the government assets were better managed. A Kashmir Life report

The Srinagar airport, a public relations man of a state government department said, is worse than a crowded bus stand. “Though a lot of space was added to it in last one year, it still falls short of the requirement as aircraft after aircraft lands.” The activity at the airport starts at 4.00 am as the first flight lands at 6.30 am. After 3 pm, the air traffic eases as the last of the 19 flights takes off. It excludes Army’s two daily chartered flights.

“The problem is that most of the flights land within three hours and almost all the passengers enter the airport at the same time,” Abdul Majid, a lower rung employee of an airliner said. “Sometimes it takes an hour to reach the airport and then one has to queue up for another hour to get into the airport.” Had there been sufficient time difference between landings of the aircrafts, the airport, he said, would look like a civilized infrastructure but that is not the case.

However, as one executive of an air-carrier said, they are happy over the airlines not changing the prohibitive tickets. “If they give this route the same concession as they give to other spots, it will look like an invasion as more traffic will be Srinagar bound,” he said. “The tickets continue to be prohibitive – Go Air sold a ticket for Srinagar to Jammu on Monday for Rs 10,000, almost a record,” he added.

But the trade says they have many unresolved issues with the air carriers. “All the tourist destinations across India have preferential tariffs but that is not in case in Kashmir,” says owner Mazda Hotel, Nazir Ahmad, who represents hoteliers in the Kashmir Chamber of Commerce and Industry (KCCI). “There are people keen to visit but insist that at the cost they fly to Srinagar, they will be able to fly to Bangkok or Singapore.”

The major issue, Nazir said, is lack of adequate connectivity with Leh. “In 1970s they started a weekly flight between Srinagar and Leh and it still continues to be a weekly flight,” he said, adding, “A large number of tourists especially foreigners are keen to visit both the destinations but are unable to do so for want of connectivity.” He said even if five percent of tourists visiting Leh diverts to Kashmir, it will mean significant gains. Unlike Kashmir, the high-end visitor prefers the high altitude arid destination.

Trade has been seeking late evening flights so that it helps attracting the high end weekend tourist. “It happens at all the destinations, people land at late evening on Saturday, play golf on Sunday and move around in the evening and then take off on Monday morning to resume their routine,” Nazir said. Srinagar airport lacks night landing facility.

But the airport crowd (around 4000 passengers each day) does convey the larger reality that Kashmir tourism is back in business. Kashmir may need to wait a bit more for the high-end visitor but the backpacker, budget tourist is fundamental for restoration of confidence that strife had shaken. This rush is a message that Kashmir is safe and secure. By now half a million have already visited Kashmir as hoards of Amarnath bound pilgrims have started arriving round the clock.

The best barometer to gauge the change that it has effected is to understand the economics of the state-run organizations that are linked to tourism. State’s commercial activity is, economists say, always ten times costlier than the private sector but these are still making good money.

J&K Tourism Development Corporation (JKTDC) has increased its revenue earnings from Rs 19.62 crore in 2008-09 to Rs 26.59 crore in 2010-11. Satish Nehru, Managing Director JKTDC told the Annual General Meeting (AGM) of the wholly state owned enterprise last month that the prevailing peaceful situation will help them generate more revenue and improve the facilities and services.

Sher-e-Kashmir International Convention Centre (SKICC) on the banks of the Dal lake that had remained the only address for the “official Srinagar’s social calendar” is coming out of the closet. It is busy and booked. From comedy to fashion, politics to music, a lot of events are taking place in its premises and most of it is considered as the ‘peace dividend’. In fact, the PMO (Prime Minister’s Office) has issued a missive to all the central government institutions to hold conferences in J&K. Some institutions have already done that. Director SKICC Dr GN Qasba stated recently that they have earned gross revenue of Rs 203.67 lakhs during 2010-11.

State’s Cable Car Corporation (CCC) that owns the prized ropeway in Gulmarg is directly linked to the tourist influx. And its earnings do show it. It earned a record Rs 12.48 crore during 2010-11 and has set a target of Rs 14.82 crore for 2011-12. Talat Parvez, its MD recently told the Tourism Minister Nawang Rigzin Jora that the CCC earned Rs 3.82 crore in first 45 days of the current fiscal.

An upbeat market has encouraged the central government as well. Tourism Minister Sabodh Kanth Sahai flew to Srinagar last month and announced a series of measures. These included three mega circuits – one each in Kashmir, Ladakh and Jammu – for Rs 50 crores each. Besides, he committed development of 35 more tourism projects of Rs 180 crore excluding Rs 12 crore for organizing laser shows at Dal lake.

Everybody is making money,” admits a trade chieftain. “Right now the hotel occupancy is 100 percent and there are bookings for next two months.” Given the state of bookings, trade foresees impressive arrivals during Pooja holidays in September and October. “There are even enquiries and in certain cases bookings as well for the winter.”

The trend emerging in the last few seasons is that tourists move in groups – a major change from the pre-militancy days. The tourists move in groups mostly for safety reasons and because of organised tour and travel operators, who have an impressive reach now.

This trend has shifted part of the business to the travel operators who hire hotels, cooks and all the related services back home. “Some of the major tour operators in south have hired hotels and the owners are just sitting at home monitoring their bank accounts,” a trade insider said, adding one of the major hotels in the city centre was taken by a Mumbai operator this season.

But it still leaves a number of tourists wanting for accommodation. Owing to the strife earlier and the disruptions during last three seasons, there has not been any substantial addition to the existing infrastructure in Kashmir either in public or private sector.

Trade insiders insist that there is no lack of infrastructure and Kashmir has enough of it to accommodate many times more tourists than it currently does. “It is the problem of the misuse of the infrastructure,” a trade leader, who wants to remain anonymous, said. “The misuse is hurting both the private and public sector and needs to be tackled.” This is despite the paramilitary forces vacating 32 hotels in last many years, occupied by them in Srinagar city alone.

A lot of accommodation stands “hired” by the state government to accommodate its functionaries which is the actual deficit. Since 1990, the government, by debt to Security Related Fund of the MHA, is hiring a lot of hotels and guest houses to accommodate its staff from Jammu for six months. This is being done on security reasons though there is not a single incident on record of any of these employees being ever attacked.

For the current year, the government has hired 111 hotels in Srinagar to accommodate nearly 3000 employees from Jammu. In these hotels, the non-gazetted employees live for six month. Expenses on their food and transport are also borne by the state government. The government also hires 190 rooms in JKTDC hotels to accommodate gazetted employees serving the state government. This is in addition to 67 Category-A huts of the JKTDC at Cheshmashahi that are perpetually under the occupation of the commissioners and secretaries.

“Had the occupation of these buildings ended, there would not have been dearth of accommodation and both the sectors would have multiplied the income,” said a hotelier whose one of the many guest houses is also with the government on a two-year contract. “Even trade is supportive of this system because of fragile nature of the situation in Kashmir so the blame should not go to the government alone.”

The JKTDC officials say in private that continued occupation of its assets by different appendages of the government means a net loss of revenue by around Rs 2 crore a month. Lodgings at much inferior surroundings of these huts cost Rs 30,000 a night, insiders say. They are used for six months and closed for the winter months. Its MD Satish Nehru informed the Legislative Council’s Departmental Related Committee (DRC) on Tourism last month that Home Department owes it Rs 52 crore on account of rent alone.

A senior functionary of the state government said they are spending Rs 47 crores during 2011-12 on accommodation, boarding and lodging of these employees. “But we have set the process of hunting for alternatives,” the officer said adding it should help change things in next five years!

Unlike Jammu, the government has a net deficit of around 4000 residential flats in Kashmir. “The government has acquired 100 kanals of land from SRTC near Pampore and the idea is to build 1500 staff quarters there,” the officer said. “In Nishat, the government has managed 50 kanals of Evacuees Property land on lease and the idea is to have 60 flats that would accommodate the senior officers.”

Estates department owns a total of 4389 flats – 3087 in Jammu and 1302 in Kashmir which is quite inadequate. Maintaining these assets is also an expensive business. In last two years ending March 2011, the government has spent Rs 56.90 crore on renovation, extension of residential flats and buildings that its Estates Department owns.

Unsatisfied
An old hand in hospitality sector Bakhshi Nazir Ahmad is keen to experiment how an Amarnath pilgrim can be converted into a spending tourist. He is one of nine tour operators in Kashmir who are authorized agents (along with nine others in Jammu) to book 25 percent of the seat capacity of three helicopter services flying pilgrims from Pahalgam and Baltal.

Shri Amarnathji Shrine Board (SASB) has engaged three carriers – Himalaya, Pawan Hans and Global Vectra, with nine choppers for flying pilgrims to Panjtarni, three kilometres short of the cave. “The board has sold half of the seats already as they make online bookings currently for the 25 percent lot leaving the balance 25 percent to the private sector,” Bakhshi said. “But I am suggesting them to stop on-line bookings so that private sector takes care of this part as well because private sector gets a visitor out of a pilgrim.”

At his level he is successfully doing it. A good chunk of the pilgrims booking through us do seek our help in going around as well. “This adds to the local stake-holding,” he said. The three choppers fly around 1500 pilgrims to the cave daily.

Bakhshi, who has handled some of the high end visitors to Kashmir in his career, however, is desperate to see a change in the mindset at the public and the official level. “We both are looking at tourism through short term prism which is killing the business,” he said, insisting that most of the visitors are unlikely to return in future because of the experiences at the individual levels. “We are sending dissatisfied tourists rather than un-satisfied tourists back home which is no good,” he added.

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