Budget View - Hotels seek infrastructure status to spur room nos

MUMBAI (Reuters) - The hotel industry expects to get infrastructure status in the forthcoming budget to help the sector match surging room demand through easier financing.

"Cheaper loans would be available to them if they get infrastructure status," said an analyst, who did not want to be named.

In the last budget, the industry got a five-year tax holiday for hotels up to the 4-star category and convention centres with a minimum 3,000 seating capacity to be built around the National Capital Territory of Delhi and adjacent districts by 2010.

India is hosting Commonwealth games in 2010.

The Federation of Hotel & Restaurant Associations of India wants the provision "to be extended to all categories of hotels throughout the country" that will open in the next 5 years, as an incentive to ease the shortage of rooms.

"Hotels would be needed across India. There is shortage all over so it will definitely help in building capacity," Chender Baljee, chairman of Royal Orchid Hotels Ltd said.

As of Dec. 31 2007, there were 84,327 rooms approved by India's tourism ministry across all categories of hotels, according to the tourism department.

About 400 billion rupees would be needed to build an estimated 100,000 rooms more needed for the expected arrival of 10 million foreign tourists by 2010, the federation said.

Foreign tourist arrivals reached 4.45 million in 2006, a 13.5 percent rise over the previous year, according to provisional figures published on the Web site of the tourism ministry.