The Uttar Pradesh cabinet has green-lighted a transformative proposal to lease out the state's tourist bungalows, managed by the Uttar Pradesh State Tourism Development Corporation (UPSTDC), to private entrepreneurs. The move aims to revitalise the facilities and enhance the experience for both domestic and international tourists.

Strategic 30-Year Lease

The cabinet's decision involves granting a 30-year lease on the state’s tourist bungalows, divided into two 15-year terms with an option for extension based on mutual agreement. Uttar Pradesh’s Minister for Tourism, Jaivir Singh, highlighted that the lease will be awarded through an e-bidding process. Singh emphasised that this approach is expected to attract private investment and improve the standard of services provided at these facilities.

Singh explained, “The 30-year lease with an annual 5% increment is designed to incentivise private entrepreneurs by offering a long-term commitment. This will not only help in upgrading the facilities but also in maintaining them at a high standard.”

Financial Terms and Management

Under the new plan, 50% of the lease amount will be allocated as handling charges to UPSTDC, while the remaining funds will be deposited into the government treasury. This financial structure aims to ensure a steady revenue stream for both the state and the tourism development corporation, while also incentivising private operators to maintain and enhance the facilities.

Singh remarked, “The financial terms are structured to balance the interests of the state government, UPSTDC, and the private entrepreneurs. The annual increment in lease amount will ensure that the financial aspects remain aligned with market conditions.”

Addressing Past Challenges

The initiative marks a significant shift from the previous practice of offering these bungalows on a five-year lease basis. Singh noted that this shorter-term arrangement had not been successful in attracting the desired level of private sector interest. “Since 1998, our attempts to lease out the bungalows for five years have not yielded the results we hoped for. The new 30-year lease model is expected to overcome these challenges and attract serious investors,” Singh said.

Currently, UPSTDC manages 87 tourist bungalows. The new lease program will target those facilities that are either running at a loss or are on the brink of closure. The goal is to revitalize these bungalows, which have struggled due to insufficient staff and deteriorating conditions.

Tourism Growth and Facility Improvement

Singh highlighted the impressive growth in tourist inflow to Uttar Pradesh, with the number of visitors soaring from 16 crore in 2016-2017 to 48 crore in 2023. Despite this surge, the state’s tourism infrastructure, including UPSTDC’s bungalows, has not kept pace with demand. Singh pointed out, “The influx of tourists has significantly increased, but our facilities are outdated and understaffed. This new leasing strategy is a critical step toward modernising our infrastructure and providing a better experience for tourists.”

The state government’s decision reflects a broader strategy to enhance Uttar Pradesh's appeal as a tourist destination by leveraging private sector expertise and investment. By addressing the deficiencies in the existing facilities and expanding their capabilities through private partnerships, the state aims to deliver a more attractive and efficient service to visitors.

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The transition to private management is anticipated to bring about substantial improvements in the quality of services and overall guest satisfaction. The state's focus on long-term leases and structured financial terms underscores its commitment to sustainable tourism development. As the e-bidding process gets underway, stakeholders will be watching closely to see how these changes will impact Uttar Pradesh’s tourism landscape.

Singh concluded, “This new approach represents a significant opportunity for private entrepreneurs to contribute to the state’s tourism sector while benefiting from a long-term lease arrangement. We are optimistic that this will lead to better managed and more appealing tourist bungalows across Uttar Pradesh.”

The cabinet's decision marks a pivotal moment in Uttar Pradesh’s efforts to enhance its tourism infrastructure and attract more visitors to the state. With private sector involvement, the future of Uttar Pradesh’s tourist bungalows looks set to be more vibrant and promising.