Government offers subsidy for building budget hotel room capacity

12 December 2007

Mumbai: The government has announced a new subsidy scheme linked to the number of rooms built by a hotel in a bid to create additional budget hotel room capacity ahead of the Commonwealth Games.

Earlier, the budget hotels were given a lumpsum subsidy, based on the star-rating of the hotel.

The subsidy scheme, announced by the ministry of tourism and culture, would be extended to budget hotels in the metropolitan cities as well.

Hotels in metropolitan cities were earlier not entitled to any such incentives.

Under the new scheme, hotels in one-star category will receive a grant of Rs2 lakh per room, subject to a maximum of Rs30 lakh for 15 rooms.

For two-star hotels, the incentive will be Rs3 lakh with a ceiling of Rs75 lakh for 25 rooms.