Assn flays 12% conversion charges on hotel construction in industrial plots

The Hotel and Resort Association Punjab welcomed the new policy of the state government but it has opposed the imposition of 12 per cent conversion charges on the construction of hotels in industrial plots, terming it arbitrary and detrimental to the hospitality and tourism sector’s growth.

Association’s state president Satish Arora said the move by the authorities to levy such a hefty conversion fee was “unjustified” and would discourage investment in the hotel industry, particularly in cities such as Ludhiana and other big cities that were striving to become business and industrial hubs.

He said: “The government’s decision to impose 12 per cent charges on changing the land use from industrial to commercial for setting up hotels is highly regressive. It not only increases the cost burden on hoteliers but also discourages new players from entering the market.”

“The hotel industry is already grappling with high GST rates, soaring operational costs and competition from online platforms. Now, this added burden makes it financially unviable to invest in new projects,” he said.

Industry representatives highlighted that many industrial plots in areas such as Ludhiana, Amritsar and Jalandhar were ideal for hospitality infrastructure due to their proximity to major commercial zones and transport hubs. “Instead of welcoming hotel development, the authorities are penalising investors with steep conversion fees,” said a hotelier.

The association has urged the state government and urban development authorities to reconsider the policy and scrap the 12 per cent charge or bring it down to a reasonable level. They also sought a dialogue with the departments concerned to explore feasible alternatives that encourage investment while maintaining regulatory compliance.

“If the government is serious about promoting Punjab as a business-friendly state, they must create enabling policies, not roadblocks,” the association concluded.

The hotel industry in the state has also warned that if the issue was not resolved soon, they might resort to protests and legal options.

Ludhiana