Himachal HC Orders Closure Of 18 Loss-Making Tourism Corporation Hotels

Himachal Bhawan

In a significant ruling, the Himachal Pradesh High Court on Wednesday ordered closure of 18 loss-making hotels operated by the Himachal Pradesh Tourism Development Corporation (HPTDC) due to poor occupancy rates.

Justice Ajay Mohan Goel, presiding over a single-judge bench, directed that the properties be shut down by November 25.

The court also made it clear that the managing director (MD) of HPTDC would be personally responsible for ensuring compliance with the order.

The hotels, described by the court as “white elephants,” were deemed financially unviable, and the judge emphasized that public resources should not be wasted on maintaining these underperforming properties.

The list of hotels to be closed includes several well-known establishments across the state, such as the Palace Hotel (Chail), Hotel Geetanjali (Dalhousie), Hotel Dhauladhar (Dharamshala), Hotel Apple Blossom (Fagu), and Hotel Log Huts (Manali), among others.

The court pointed out that the occupancy rates at these hotels were “much more dismal” than expected, highlighting the failure of HPTDC to turn a profit from these properties. This was evident from occupancy data provided by the corporation for 56 hotels currently in operation, which was submitted in compliance with a previous court order.

The court further noted that continuing the operation of these loss-making hotels was placing an undue burden on the state’s finances.

Acknowledging the financial crunch in the state, the bench noted that there had been no meaningful steps taken by the HPTDC to address the issue since the court’s previous order in September 2024.

The court’s ruling underscores its concern over the corporation’s lack of progress in augmenting its resources and improving profitability.

In addition to shutting down the hotels, the court directed that only essential staff be retained to maintain the properties until their closure. The remaining employees may be transferred to other locations where needed.

The MD was also instructed to file a compliance affidavit detailing the implementation of the closure order.

The court also mandated that a list of superannuated or deceased Class-IV employees be provided so that the dues owed to them can be released to their families. On the next hearing date, December 3, the corporation is expected to inform the court about the dues owed by government and private entities.

This decision marks a major step in addressing the financial inefficiencies within the HPTDC, urging the corporation to reevaluate its operations and reduce wasteful expenditure.