Any mention in the Budget is inevitably reason for more teeth-gnashing rather than celebration. The last few years may have been marginally better than most, but waiting for relief has proved like waiting for Godot - frustrating and, perhaps, unlikely.
Still, the industry's expectations from this year's Budget were riding high. A runaway economy needs its hotels - right?
Surely the finance minister would find some way of lowering taxes and offering the industry concessions, especially where land costs are concerned. But, as always, the FM played ducks and drakes.
The only sop has been for hotels in Delhi in the national capital region (NCR). "We will require 20,000 more hotel rooms for the Commonwealth Games, hence I propose a five year holiday from income tax for two-, three- or four-star hotels as well as for convention centres with a seating capacity of not less than 3,000," announced Chidambaram, with the caveat that these need to be completed during the period April 1, 2007 to March 31, 2010.
A case of paying lip service to the inevitable, feel some, like Siddharth Thaker, an associate director with hotel consulting firm HVS International.
"The planned supply in the budget and the mid-market categories within the NCR region is on track and will bridge the demand supply gap in 2010," says Thaker.
Keeping the Commonwealth Games in sight, there are already 60 new hotel projects under various stages of development, which will add 19,000 rooms by 2010 (all of these are branded developments).
There are already 10,000 branded rooms in the NCR. Unbranded hotels and guest houses in Paharganj, Karol Bagh, Gurgaon and Noida add another 10,000 rooms to the total, making 39,000 hotels available to the capital by 2010. Add any more rooms, says Thaker, and you'll crash the market with oversupply.
His take: The budget should have looked at similar exemptions on budget and mid-market hotels across the country instead of just the NCR.
Other hoteliers have mixed views. Uttam Dave, head of development, Accor Hotels, feels the tax exemption is not a very significant step.
"Confining it to only the NCR is paying mere lip service. It is not going to make any difference to our plan in the NCR," he says, adding: "In terms of an investment perspective, it is going to have zero impact on our decisions." Accor already has three hotels under development in the NCR.
Mandeep Lamba, managing director at Dawnay Day Hotels-India, still to have a footprint in the country, feels it's a step in the right direction but hardly a big ticket event.
"It takes a hotel 2-3 years to break even. Essentially then, such hotels will get a tax benefit only for the remaining 2-3 years." The likely beneficiaries then will likely be those who are already building or already have the land to build their hotels.
Still, says Suresh Kumar, president, Fortune Hotels, "It will egg people on to build more hotels. We are already thinking about new properties within the NCR," he says.