Be prepared to shell out extra if you want accommodation in Calcutta!

You most likely will have to put up at a five star property, thanks to a shortage of over 3,000 rooms in smart or budget hotels where room tariffs vary from Rs 1,500 to Rs 2,500.

“Almost all the development in the hospitality sector, barring one or two, is in the luxury segment,” said Rajesh Mishra, the president of the Federation of Hotel & Restaurant Association of India (FHRAI).

“A land crisis in the city has almost made it impossible for developers to launch projects in the smart or budget category. The shortage of rooms in this category is 3,000 and counting. If the government does not address the issue immediately, the bulk of the market will be lost,” he added.

The shortage of 3,000 rooms means the city needs at least 100 hotels in the smart or budget category.

Bengal has about 6,000 hotel rooms, of which 4,500 are in Calcutta. Of these, 1,500-2,000 are in luxury properties.

FHRAI figures reveal how India is lagging behind countries like China in the hospitality industry — there are around 1.5 lakh hotel rooms in India against 10 lakh rooms in China.

The cost of setting up a three-star property in Calcutta is around Rs 6-7 lakh per room, excluding the land cost which has gone up to Rs 10 lakh per room.

“Even in New Town, a planned city, there is provision for only one three-star property. The other hotels scheduled to come up there belong to the five-star category,” pointed out Mishra.

According to his calculations, the “showpiece township” will face a shortage of around 500 rooms in the non-five star category.

“Even sector V in Salt Lake does not have a single plot earmarked for hotels. The land scarcity has assumed such proportions that for any expansion in the city, we have to either refurbish existing properties or enter into management contracts,” said Suborno Bose, of The Tower (Zoom Developer Pvt Ltd), the only hotel in Sector V.

“Land use laws need to be overhauled in many such commercial or business districts to make way for hospitality projects,” he added.

There are 12 luxury hotels coming up in the city with 2,374 rooms, most of which will be operational by 2009-2010.