Disinvestment of ITDC Hotels
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Case Code: BSTR480 Case Length: 14 Pages Period: 1997-2015 Pub Date: 2015 Teaching Note: Available |
Price: Rs.500 Organization: India Tourism Development Corporation (ITDC) Industry: Tourism Countries: India Themes: Tourism Marketing, Crisis Management, Strategic Planning |
Abstract Case Intro 1 Case Intro 2 Excerpts
Background Note
After the Non–Aligned Movement conference in 1956, tourism was recognized as a viable source for the economic growth of India by the first prime mister of independent India, Pandit Jawaharlal Nehru. He wanted to set up big and luxurious hotels to cater to the needs of foreign dignitaries visiting India. In 1964, the government set up three firms, India Tourism and Hotel Corporation; India Tourism Corporation Ltd., and India Tourism & Transport Corporation. In 1966, ITDC was formed through the merger of Janpath Hotel India Ltd. and India Tourism Transport Undertaking Ltd. It was incorporated with the objective of developing and expanding tourism infrastructure in the country and thereby promoting India as a tourist destination. ITDC was started with an initial capital of Rs50 million, which was later increased to Rs350 million and Rs600 million in 1973-74 and 1981-82 respectively.
During the 1960s and 1970s, the hotel industry in India became a lucrative option as it had prospects of earning a high level of foreign exchange and of serving as a direct and indirect source of employment. Moreover, with the entry of private players such as the Taj Group of Hotels, Oberoi Hotels & Resorts, and the ITC, competition intensified. Attracted by the lucrative hospitality business, ITDC stepped into the hotel business with the purchase of Hotel Chola in Chennai in 1975.....
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