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Odisha: A potential territory for hotel investments

Although endowed with rich bounty of history, heritage and unspoiled nature, the State of Odisha hasn’t been able to cash in on their tourism assets because of inconsistencies in marketing and promotional aspects. However, the hotel industry stakeholders in the state expect a turnaround in the situation soon considering the state government’s aggressive approach to tourism sector of late. Hospitality Biz tries to sum up the hotel industry scenario in the state of Odisha.

Thursday, September 17, 2015, 10:00 Hrs  [IST]

Odisha is one of the states in eastern part of India which is known for its rich history, heritage, diverse landscapes full of captivating flora and fauna. A coastal state, Odisha has a pristine coastline of 480kms. Odisha coast is known for its rare but natural spectacles which attracts lot of nature enthusiasts. The vanishing sea of Chandipur where water recedes around 5kms during the low-tide is located in the northern district of Balasore. Odisha’s coast is also popular as a nesting haven for rare and endangered Olive Ridley turtles. The famous Chilika Lake, Asia’s largest brackish water lagoon, is in Odisha, which is a haven for migratory birds and is also the sanctuary for the endangered Irrawady Dolphins. Demographically, Odisha boasts for being the custodian of 62 indigenous ethnic tribes, the highest in any Indian state. The state is also the abode of Gods. Lord Jagannath temple in Puri, Lord Lingaraj Temple, and the Konark Sun Temple are visited by pilgrims from all corners of the world. It is believed that Buddhism travelled to other South and South East Asian destinations from Odisha. There are quite a few places considered sacrosanct for Buddhist heritage in the state.

Despite all these tourism assets, the State has not been able to gain full benefit out of it so far for various reasons. A large chunk of tourism that happens in the state is still related to religious or pilgrim tourism. As the state remained off limit from international travelers itineraries due to issues related to accessibility, etc., there hasn’t been much interest for major hospitality brands to set up their shops in the State. Hotel industry in Odisha , therefore, has been largely dominated by domestic or local brands.

Hotel supply-demand scenario:
In the absence of major demand drivers, notably inbound travel, Odisha’s hotel business is largely depend on corporate, government and to certain extend to weddings and banquets. However, there is dearth of quality accommodation in the State, especially in the famed Golden Triangle of Odisha Tourism – Puri, Bhubaneswar and Konark. “ In my opinion, all the three places are in short supply of quality rooms. Puri does not have more than 200 rooms in 3-star plus category. Bhubaneswar is far behind in 5 star categories with even less than 200 rooms. Konark still does not have a star hotel yet,” informs Debasish Patnaik, Director, The Crown Hotel Bhubaneswar.

JK Mohanty, Chairman & Managing Director of Swosti Hotels also confides about the huge supply gap that exists in key destinations in the State. “As per the current demand-supply scenario, Odisha needs a minimum of additional 5000 rooms across the state particularly in the key tourist destinations of Odisha to attract more foreign as well as domestic tourists to the State. The State Govt. is identifying lands at different eco tourism zones, major tourism products like Shamuka project, Chilika lake and Bhitarkanika etc., to develop good numbers of hotels in each tourist destinations,” he said.

Although there is shortage of quality accommodation in the State and at key destinations, because of meticulous planning, especially in Bhubaneswar , enough quality accommodation is available within a small radius of conference and convention venues, observes Dilip Ray, Managing Director, Mayfair Group of Hotels. “ Currently Bhubaneswar, the capital, focuses largely on corporate movement with a slightly lesser mix of leisure. However, credit should be given to the planning of the city and the fact that you can get over 800 three star and above category rooms within a three kilometre radius of two of Eastern India’s largest conference venues. The leisure market is likely to pick up soon with the connectivity of airlines that have been addressed and also the Bhubaneswar airport being declared international,” he observes.

Expressing his views on the demand-supply scenario in the key cities in the state, Harihar Patra, Director, Toshali Hotels & Resorts said that except for Puri, the other cities are not doing well in term of hotel occupancies. “The other destinations are mostly covered by a day trip. Destination like Bhubaneswar is not able get the appropriate occupancy as there are not much of business travel happening.”

Investment Oopportunities:
Although the state has immense potential for prospective investors to invest in tourism products, including setting up hotels, the momentum is yet to pick up to new investments, the industry watchers say. Connectivity with other cities of the country is a major issue the state has been grappling with for a long time. The state government has been pleading with the Ministry of Civil Aviation and airline companies to improve air connectivity.

Odisha still is a virgin destination as far as investments are concerned, Patnaik observed. Barring Puri and Bhubaneswar, there is hardly any proper infrastructure available for tourist at any point. Even in Puri, where there is an inflow of more than 25,000 tourists every day, there is no other tourist friendly infrastructure available, other than the hotels. “What has probably withheld investors into the state is lack of information and availability of free hold land for development of large hospitality projects,” he said.

According to Patra, the government and its agencies have to create the basic infrastructure and work closely with stakeholders of the industry “with accountability” to build confidence in the minds of investors.

Calling the new Tourism policy of the Odisha Government “most advanced” one in the country, Mohanty expects that to catapult Odisha into the forefront of tourism in coming years. “Incentives never heard before have been incorporated into the new tourism policy which would produce huge inflow of investment in the tourism sector. We are confident this policy would definitely attract investors to consider Bhubaneswar and Odisha in particular as an attractive investment destination.”

Support system:
While there has been a realization on the part of the state agencies of late on the innumerable opportunities that tourism can bring to the state economy, the industry in the state does feel that the state has to do a lot more in terms of publicity, marketing, etc. on the domestic and international platforms in order to gain visibility for Odisha. “One of the important things Odisha Tourism must do in order to unshackle the tourism potential it has is ensure it stays relevant and visible to the domestic as well as international markets. Once the awareness is built, and people begin to experience Odisha, it is almost certain that they will return and ensure others too come and experience this incredible state,” opines Ray.

Recognising the proactiveness of the government and the state agencies, Patnaik also felt that things would look up for tourism in the State going forward. “The state government in recent times has been quite proactive for growth of tourism in the state. They now have a proper Tourism policy in place with long term road map for development. With sustained promotion and world standard infrastructure, Odisha can become a hotspot in Indian’s tourism map.”

“The prospects of Odisha tourism are very bright,” Mohanty said with confidence. What the destination wants is little more thrust on publicity and attention on upkeep and hygiene at beaches and other tourist destinations, he suggested. “Odisha definitely holds the potential to become one of the most important tourist destinations of the country. The State is pollution free, peaceful and people with the attitude that go all out to welcome tourists. No other state in the country can boast of such rich tourism potential,” noted Mohanty.

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