Pichavaram hotel franchised out to avoid huge losses: TTDC
June 5, 2010 Leave a comment
CHENNAI: To avoid huge losses from the Pitchavaram hotel operations, Tamil Nadu Tourism Development Corporation (TTDC) has franchised it out to a private hotelier, while it will carry out the boating operations, said TTDC Managing Director A.C. Mohandoss on Friday.
In a press release, Mr. Mohandoss stated that for the last five years, TTDC was operating only three rooms in Pitchavaram as the Forest Department had refused to renew the lease of the land on the island side that had six cottages and a dormitory. Hence, TTDC was constrained to keep it under lock and key since 2005. Moreover, it was not safe for tourists to stay in the cottages at night.
The loss from Pitchavaram hotel was Rs.2.80 lakh during 2005-2006. It increased to Rs.7.33 lakh in 2009-2010. The hotel was incurring losses since its inception in June 1984, he said.
So the TTDC board resolved to franchise it out and the State government gave its approval for the decision. It was franchised out through open tender process for a fee of Rs.10.80 lakh per annum with an escalation of 15 per cent once in three years, the release said.
The new arrangement will enable TTDC to avoid huge losses and at the same time earn substantial revenue. The amount thus generated will be used for upgrading the boating facilities. Besides, the franchisee has proposed to construct 20 eco-friendly cottages, as TTDC was unable to do the same due to budgetary constraints, the release said.
According to Mr. Mohandoss, the total turnover of Pitchavaram unit increased from Rs.22.16 lakh in 2005-2006 to Rs.96.50 lakh in 2009-2010. The rise in turnover was mainly attributed to revenue from boating operations that increased from Rs.13.67 lakh in 2005-2006 to Rs.64.60 lakh in 2009-2010.
Mr. Mohandoss said that several steps had been taken to improve the infrastructure facilities at Pitchavaram for which Rs.1.02 crore was sanctioned. The department had prioritised Pitchavaram Road at a cost of Rs.4.65 crore.
Noting that the existing building in the Chidambaram unit is in a dilapidated condition, he said that the State government proposed to take it over and construct a new government guest house.