Single tourist employs 39 people in India: Vithal V Kamat, Kamat Hotels
“Domestic tourism has a vast scope in India and the related business should keep running regardless of a foreigner’s visit”, says Dr Vithal Venkatesh Kamat, Chairman and Managing Director, Kamat Hotels (India) Ltd, in a candid chat with Zee Business.
“Domestic tourism has a vast scope in India and the related business should keep running regardless of a foreigner’s visit”, says Dr Vithal Venkatesh Kamat, Chairman and Managing Director, Kamat Hotels (India) Ltd. During a candid chat with Dimpy Kalra, Zee Business, Mr Kamat also said that the government has set a minimum limit of Rs200 crore as the loan amount that should be granted to our industry, but it must not do so. Edited Excerpts:
Q: The government’s aspiration to make India a tourism hub is very clear and even Prime Minister Prime Minister Narendra Modi has spoken about it the Parliament. Do you think that this year’s budget is trying to fulfil the Prime Minister’s dream, if yes, then what is its pace?
A: Two-three things are required to turn this dream into a reality and they include immediate planning, which is followed by 5 years planning and then final planning. These three things should be discussed by calling five people like us, not only the hoteliers but also people from trade and tour. They should enquire about the problems that are being faced by us because there is a vast difference between the problems being faced by the world’s tourism industry and the Indian industry.
Domestic tourism has a vast scope in India and the related business should keep running regardless of a foreigner’s visit. A single tourist’s visit provides a job to a minimum of 39 people and in a place like Varanasi, the number goes up to 70. So, tourism should be encouraged. Hopefully, the thing that doesn’t happen in the past will happen in the future. I have been into this business for the last 50 years and thus can say that we don’t need any compassion. But, if you wish us to stand at par with the international industry then you should facilitate us with things, for instance, to bring a local runner at par with the international runner you must equip him with the right equipment like a shoe, a T-shirt and a good trainer. As this government sincerely desires to improve tourism, I expect it to take people like us together, understand the problem and eventually find a solution as prior planning prevents the problem. They should perform the respective operations in the right place and time.
Q: What do you expect from the government and what should it do?
A: The important duty that government should undertake is, it should impose a minimum tax for adventure tourism in the tourism sector. If the government aims to bring in a tax of Rs3000 crore, it should understand that increasing the tax rates won’t bring a huge amount of tax but keeping the tax reasonable could also bring Rs4000 crore and I have such a type of a scheme and we have implemented such a thing. We operate four types of businesses out of which one includes the restaurant business where we sell tea for Rs30 and other minimum rates vary from Rs40-50. In the second one, the cost of tea is Rs60 while in our ‘Orchid’ (hotel), the cost of tea is Rs300. You can’t club these three things in one place. If you perform a parity of these things with what is happenings in other countries, these it will not work. But, you should bring everything together and do mathematics on total consumption and total taxation as they must be equalised.
Q: What if the government gives you relief on taxation? Do you think that the government can also bring some policy like Special Economic Zone (SEZ) policy for your industry where it will mark 100 tourism destinations and provide lands to every hotel through tenders with an aim to promote tourism in India?
A: You are showing me a dream, please don’t show me a non-existent scenario. If it, the government, would have done this in the past then it would have been like the Singapore government and it would have done 50 years ago down the lane.
Q: I am not dreaming you but am hoping because if the government can bring SEZ to boost industries then why can’t do the same for the hotel and tourism industry?
A: You must have a look at Odisha tourism as the state government calls you, allots you land and this process has resulted in tourism growth in the state. We have 3 hotels there and I am ready to open another 30 over there because their governance and discipline are functioning well. Earlier, they came to Mumbai and invited over 700 people to the state, served them with meals, explained the scenario, asked me to deliver a speech and solved difficulties by the question and answer methodology. Their tourism officer Vishal Dev and their minister faced the people and cleared misconceptions about the state of Odisha. In fact, they restored to power in the state within 20 days after the state was hit by cyclone ‘Fani’ and this restoration of power sources helped us to restart our business. This is a result of the rule, proper planning and control. I request the government to understand the scenario and do it. I can guarantee them that they will be earning the desired amount of tax. Paying high taxes won’t lead to the higher collection of taxes but its higher use will. As you discussed the allocation of plots, this decision is implemented in many parts of the world. Our tourism industry trends are based upon capital intensive tourism. One cannot start a 200 rooms’ hotel with just 2 rooms as the entire infrastructure is needed to be built. It is disappointing as the administration has not understood the concept of tourism.
Q: What are the margin of the company and how will they increase?
A: The margins should increase, and they will increase if there is an increase in sales. Your operating costs remain similar and permanent and the extra cost is incurred in case of a decrease in sales. This government has done a good work, for instance, the unreal builders who existed in the real estate sector in the past have disappeared – almost 40-50% people are out – similarly they, builders and others, also came to our industry. But there is a slight difference between glamour and business. So, those who entered the sector for glamour failed in doing business as it should be done. ‘Atithi Devo Bhava’ (The guest is equivalent to God) is a catchphrase and it is important to stand by it. So, the government will have to think about the purpose of taking people like us into consideration.
Q: Do you have any debt on the company?
A: The present government had the chance to improve the incorrect laws made by previous governments, but it didn’t do it. Our industry should be provided with a loan with tenure of 15years, but the previous government had made laws where we are offered loans with a tenure of 7years and it must be more than Rs200 crore. However, the government is no one to decide the loan amount but it can say that take money for the project and return it on time along with interest. We are capable of it. This period should be increased from 7years to 15years and it is happening across the world.