The Tourism Ministry decision to open two more Institute of Hotel Managements has come despite a majority of the 21 existing centres struggling to stay afloat.
The Ministry plans to open two more institutes in Amethi in Uttar Pradesh, which is Congress vice-president Rajiv Gandhi’s constituency and in Kottayam in Kerala, which is Kerala Congress’ Jose K Mani’s constituency, by the end of this year.
According to the Tourism Ministry guidelines, a maximum amount of `10 crore could be sanctioned for each project.
A September 2012 study to assess the financial sustainability of seven institutes across India, commissioned by the Ministry itself, showed that “the financial performance of the IHMs is deteriorating year-on-year.”
The report compiled by Business and Industrial Research Division of IMRB international read, “The
current financial condition is also not very good.”
Barring the two IHMs in Chandigarh and Shimla, which were profitable, IHM Bangalore and IHM Shillong records showed that they were barely able to exceed break-even. The report went on to show that IHM Pusa, IHM Srinagar and IHM Guwahati were running in considerable losses.
The report said that “the break-even point in terms of operating income to be generated from the students for all institutes is found to be much higher than their current strength.” Barring IHM Pusa, Chandigarh and Shimla, which got adequate students, the rest were reeling under severe student shortage.
In its recommendation also the report states that the only rescue route for these ailing institutes was to launch “a large-scale initiative for capacity building and student recruitment.”
Senior officials in the Ministry, however, defended the decision of opening more centres. “All our centres are doing very well, which shows there is a definite need. looking at the fast expanding tourism market in the country, the demand for such specialised institutes is only set to grow,” said a senior official in the Ministry.
“Only three IHMs — one’s in Shillong, Guwahati and Srinagar — are underperforming and that is because they are unable to find enough students to fill up their seats, which is probably because of their locations,” he said.
There are 21 IHMs, including those in Bangalore, Delhi, Mumbai, Bhopal, Bhubaneswar, Kolkata, Chandigarh, Chennai, Delhi (Pusa), Gwalior, Hyderabad, Shimla and Thiruvananthapuram.