Dharamshala, May 22
Two years of Covid recession and declining influx of tourists have affected hotels and other commercial properties in Kangra, with 163 of these closed or on the verge of closure due to loan defaults.
According to data compiled by The Tribune, most of these properties comprise hotels, which are facing action under the Sarfaesi (Securitization and Reconstruction of Financial Assets and Enforcement of Movable Guarantees) Act of 2002. Banks have moved closer to district authorities to obtain these properties. auctioned off to recover their dues.
This week, two famous hotels in Dharamsala were sealed under the Act, which empowers banks and other financial institutions to take over and auction off properties that become NPAs (non-performing assets) after loans go unpaid. Orders to seal properties are given to banks by district magistrates. Kangra Deputy Commissioner Nipun Jindal said the proceedings in bad debt cases were carried out at the request of the banks and the 163 cases may have accumulated over the past year. The Upper Dharamsala Hotel and The Restaurant Association has blamed Covid and the slow post-pandemic tourist season for hotels being unable to pay dues. The association’s president, Ashwani Bamba, also blamed the government for allegedly failing to promote tourism in the state despite the fact that the sector is a major contributor to GDP and job creator.
Post Covid, a large number of tourists have been visiting Kashmir and Uttarakhand. Hotels in Kashmir are packed until July, while the Uttarakhand government’s Char Dham Yatra has also attracted large numbers of tourists. “Unlike in Jammu and Kashmir and Uttarakhand, the Himachal Tourism Department has failed to make its presence felt in the major festivals that are organized in various parts of the country to attract tourists,” said Bamba.
Kangra hoteliers say poor connectivity and high airfares to the region were also responsible for the decreased influx of tourists. Airfare to Dharamsala is among the highest in the country and is unlikely to drop until the Gaggal airstrip is expanded to allow larger planes to land. The expansion proposal has been pending for years and even the land acquisition process has not yet started.
The sources said the hoteliers planned to approach the state government to seek relief for properties facing action under the Sarfaise Act.
Hoteliers blame the state government
- The banks sealed the properties and listed them for auction after they became NPAs.
- Hoteliers blame Covid and declining tourist influx for bad business
- They also blamed the Himachal Pradesh government for “not promoting” the tourism sector.
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