The Himachal Pradesh High Court has directed the closure of 18 unprofitable hotels owned by the Himachal Pradesh Tourism Development Corporation (HPTDC), including the iconic Palace Hotel in Chail. This order, effective from November 25, 2024, comes after the corporation failed to implement effective measures to make these properties financially viable.
Justice Ajay Mohan Goel, presiding over the case, expressed frustration with the HPTDC’s inability to generate resources or present a practical plan for improving the financial performance of these hotels. The court had previously given the corporation ample time to address its financial issues but found that no meaningful progress had been made. Justice Goel remarked that the HPTDC had not even made minimal efforts to address the problem, stating, “Not even a small pebble has been moved/turned by the Tourism Development Corporation in said direction.” The closure order aims to prevent further wastage of public funds on the upkeep of these “white elephants”—properties that are evidently not sustainable in their current form. Justice Goel further emphasized that the responsibility for enforcing this order would lie with the managing director of HPTDC, who is expected to oversee the closure process. To ensure minimal disruption, the court allowed for a skeletal staff to remain at each property, tasked only with maintenance duties. Additionally, the corporation has been permitted to transfer other employees to different roles within the organisation.
In a scathing part of the ruling, the court also directed the HPTDC’s managing director to compile a list of Class-IV employees who have retired or passed away, as the court sought clarity on outstanding pension and retirement dues. The HPTDC was instructed to provide information on how much additional revenue has been collected from pending dues owed by government and private entities to facilitate the payment of these benefits. This ruling follows a petition highlighting the HPTDC’s failure to disburse retiral benefits to pensioners, marking a broader concern about the corporation’s financial mismanagement. The closure of these properties marks a pivotal moment for the state’s tourism sector, which may need to re-evaluate how government resources are managed in the face of increasing economic pressures. The decision also underscores the growing need for efficient governance and accountability in the management of public enterprises. While the HPTDC’s closure of unprofitable hotels is a necessary step towards financial sustainability, it remains to be seen how this will affect the state’s tourism sector and public sentiment towards the state-run corporation.
