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The Himachal Pradesh High Court has directed the closure of 18 loss-making hotels operated by the Himachal Pradesh Tourism Development Corporation (HPTDC) by November 25, 2024, citing unsustainable operations and financial losses. Staff from the closed properties will be reassigned. The ruling follows a petition about unpaid dues to retired employees, highlighting HPTDC's struggles with profitability and financial management. The court emphasized that the closures aim to reduce the financial burden on the state's treasury and redirect resources towards more viable ventures to promote sustainable tourism growth.
In a significant ruling, the Himachal Pradesh High Court has directed the closure of 18 hotels operated by the Himachal Pradesh Tourism Development Corporation (HPTDC), citing their ongoing financial losses and the unsustainable nature of their operations. The decision, which must be implemented by November 25, 2024, comes in response to a petition related to unpaid dues owed to retired employees of HPTDC. Justice Ajay Mohan Goel referred to the 18 properties as "white elephants" and ordered that staff members working at these hotels be reassigned to other HPTDC-managed properties. Advertisement
The court's decision is rooted in the corporation's inability to maintain profitable operations despite running a total of 56 hotels across the state. Many of these hotels have been incurring losses for several years, and the corporation has repeatedly struggled with paying employees' salaries, pensions, and other service benefits. During the hearing, the court reviewed the occupancy rates of the 56 hotels, noting that a significant majority of them have consistently reported occupancy rates of less than 50% over the last three years. Justice Goel expressed frustration over the lack of tangible progress since the court's previous order in September 2024, when it had hoped that the HPTDC would present concrete measures to improve the financial situation of the tourism corporation.
Justice Goel's comments highlighted that, despite the court's earlier expectations, there had been little to no effort from the corporation to enhance its resources or address its financial shortcomings. The judge remarked that the continued operation of these loss-making hotels served no productive purpose and was an inefficient use of public funds. Furthermore, the closure of these properties was seen as necessary to alleviate the financial strain on the state's treasury. He stated that the operation of these properties, which were failing to generate any substantial profit, was essentially a burden on the state's finances.
The court's ruling also took into account the broader financial challenges facing the state, which have been a recurring theme in various matters brought before the court. It emphasised that the HPTDC's failure to effectively utilise its assets for economic gain has exacerbated the financial difficulties faced by the state government. As a result, the court deemed it imperative that these underperforming properties be shut down in order to reduce the financial burden on the state's exchequer and redirect resources to more viable ventures.
In conclusion, this move underscores the need for HPTDC to streamline its operations and focus on sustainable, profitable ventures. The closure aims to reduce financial strain on the state, ensuring resources are better utilised for the tourism sector's growth.
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