HPTDC to file review petition in HC against its order to close 18 ‘unprofitable’ hotels

HPTDC managing director Rajiv Kumar on Wednesday said that these hotels are heritage of the state government. “We will file a review petition in the matter in the high court.”

State revenue minister Jagat Singh Negi added that that some of these hotels are located in prime locations. “Those are our heritage and there is a need to check these hotels minutely. I personally visited some of these and the hotels have a lot of potential,” he said.

The order, issued by Justice Ajay Mohan Goel on Tuesday, came during the hearing of a petition concerning the non-payment of financial benefits to retired employees of the corporation.

The court instructed the HPTDC Managing Director to comply with the closure orders by November 25, setting the next hearing date for December 3. The corporation operates 56 hotels across the state, many of which have been running at a loss for years. It has struggled to pay salaries and pensions, with the matter of pensioners’ service benefits still pending in court.

The 18 hotels ordered to close include The Palace Hotel (Chail), Geetanjali (Dalhousie), Hotel Baghal (Darlaghat), hotels Dhauladhar, Kunal, and Kashmir House (Dharamshala), Apple Blossom (Fagu), Chanderbhaga (Keylong), Hotel Devdar (Khajjiar), Giriganga (Kharapathar), Hotel Meghdoot (Kiarighat), Sarvari (Kullu), Log Huts, Hadimba Cottage, and Kunzam (Manali); Hotel Bhagsu (Mcleodganj), The Castle (Naggar) and Hotel Shivalik (Parwanoo).

The order stated, “On December 3, the Managing Director of the Tourism Development Corporation shall file a compliance affidavit regarding the implementation of the order passed today and furnish a list of retired Class-IV employees and deceased employees. The funds generated from the dues received by the Tourism Development Corporation shall be ordered to be released in favour of the retired employees and the families of deceased employees. The Tourism Development Corporation shall also update the court on the amount received from dues payable by the government and private entities to the Corporation.”

“To ensure public resources are not wasted… on these ‘white elephants,’ it is hereby ordered that the properties listed shall cease operations effective November 25, 2024, as their continued functioning is financially unfeasible,” the court added.

In compliance with earlier court orders, HPTDC had submitted occupancy data for its 56 hotels. The court permitted “skeletal staff” for essential property upkeep and allowed the corporation to transfer the remaining employees elsewhere.

The court noted that hotels with less than 50 per cent occupancy were a “burden on the state” and criticised the corporation for failing to utilise its properties profitably. It observed, “The continuation of these properties’ operations is a burden on the state exchequer. The court takes judicial notice of the state’s financial crunch, which is frequently highlighted in cases involving finances.”

Meanwhile, explaining the reasons behind the less occupancy, a senior HPTDC officer said, “Hotels and home stays are mushrooming across the state and tourists nowadays have a lot of option to choose from. We can’t consider just the less occupancy to determine the significance of these government-run hotels. For instance: Hotel Holiday Home (HHH), Shimla, has 69 rooms and it had an occupancy of 49.28% in 2022, 44.30% in 2023 and 40.44% in 2024. However, despite the 50 per cent occupancy, HHH has many other attractions, including a banquet hall, large seminar room, meeting room which are widely used.”

He added that Hotel Hamir (Hamirpur), Jwalaji (Jawalamukhi), Ros Common (Kasauli), Tourist Inn (Rewalsar), The Suket, Sundernagar and Himachal Bhawan (Chandigarh) have occupancy rates above 50 per cent.