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It's a tough call. Will issues like the prohibitive cost of land to build hotels in delhi, the drive to augment rooms for the Commonwealth Games the high luxury taxes, not to mention the lack of buyers for hotel plots get resolved before the tourists are here? It's a fairly disastrous situation on hand in the run-up to the event. Even the Finance Ministry's sweeteners such as a Five year tax holiday for two, three and four star hotels and convention centres specifically catering to Games requirements in Delhi, Gurgaon, Ghaziabad and Faridabad has not done much to get more hotel groups to venture into the segment.

Experts admit that there is a wide gap between supply and demand of hotel accommodation in Delhi and an additional 20,000 rooms will be required to cater to the tourist inflow into the city during the Games. They say that a better idea is to augment the present capacity with temporary accommodation solutions and not to build more room only for the Games. "One element of the hospitality challenge is to enhance hotel capacity to meet existing requirement to accommodate the needs for that 10-day period when one would have peak incremental visitors," says Mukesh Khandelwal of Feedback Ventures, an infrastructure services company. During the Games it is expected that accommodation will be required for 1,50,000 visitors. Khandelwal says that even Melbourne had enhanced its hotel capacity by 15 percent over their pre-Commonwealth level during the Games.

There is no sign of hotels planned to meet the demand. Las year, the DDA made some headway in auctioning plots on which new hotels would be built. DDA has managed to sell just 13 of the 38 plots that were put for auction in the past year. And few of the plots that it did manage to sell are already up for resale. On top of it all, work has not even started on any of the proposed hotels. "The auction of plots in Delhi has failed miserably because of the high auction price. The Government must refrain from the mindset of maximizing profits from land and push for development of the infrastructure required by the city by selecting right entrepreneurs who are well versed in the hotel business and merit building new hotels in PPP model. This way, the land prices will be less and the project more viable," points out Rajesh Mishra, President - Federation of Hotel and Restaurant Association of India (FHRAI).

According to Manav Thadani, Managing Directory, HVS, a consultancy, "The unfortunate part is that there appears to be no plan at all and I think we are going to have a fairly disastrous situation on our hands closer to the games,." He adds, "The government should have created a master plan for hotels and then gone about it. DDA has been more interested in making money on the land rather than doing something iin coordination to benefit the games. I would suggest a lease model where DDA and the private developers could have been partners. And this would have ensured cheaper land and more interest from real hotel players as opposed to real estate speculators. Also the land parcels should have come with a host of pre-approved clearances or a single window clearance for all permits."

As for the tax holiday given by the Centre, the sites allotted by DDA for construction of hotels are far off from the city. These areas are not economically viable. After the Games nobody will visit them, points out Mishra. The five-year tax rebate does not help. Hotels do not make money in the first few years and add to this depreciation then the tax break is only on paper, says Thadani.

FHRAI is evaluating several services for the Commonwealth Games, which includes centralized booking of hotel rooms - offered to it by the Union Ministry of tourism - before taking a decision, says Mishra.

The best option, as of now, is the Bed and Breakfast scheme. On June 25, the Delhi Government approved the draft of the Bed and Breakfast Establishments Ordinance 2007 and forwarded it to the Lieutenant Governor for promulgation. Registration for the scheme would begin by September. The government would register owners of residential properties interested in taking in tourists in their homes once it comes into force. The owners of the residential units who volunteer for the scheme will not be taxed at commercial property rates and would be exempt from luxury tax and VAT.

Guest houses in Delhi also need to be regulated. Besides, thrust should be on budget hotels and service apartments. "The hotel industry has been asking DDA to allot smaller plots on which budget hotels can be built and unless the work starts now the hotels will not be ready in time for the games," points out Mishra. Several developers have evinced interest for service apartment projects. DDA has received expression of interests (EoIs) for developing over 25 services apartment projects in the capital. Close to 40 projects have already been cleared in Noida and Greater Noida. "Parsvnath Developers Ltd. Is in the process of executing first Serviced Apartment complex in Bhiwadi to provide such facilities to travelers and real estate owners. The event of the magnitude of commonwealth Games will induce large amount of business travel before the commencement of games. As an after effect of the games there will be evolved connectivity and corporate style in the country. Either way we expect the demand for serviced apartment to grow," says Dr. B.P. Dhaka, COO-M.P. & Corporate Governance, also the official spokesperson, Parsvnath Developers Ltd.

Another silver lining is a hospitality district in the airport complex, adjacent to National Highway 8, proposed by Delhi International Airport Ltd (DIAL),. As far as preparedness for the Games is concerned, the words of Ajay Ka Bakaya, Executive Directory, Sarovar Hotels, sum it up. "We are way behind in time. To be ready before the Games, we need to be on a 100 m sprint and not be in for a slow painful marathon as far as decision-making is concerned.