Himachal Govt Faces Protests Over Tourism Hotel Privatization Plan

Shimla, July 13, 2025 — The Himachal Pradesh government is facing rising public outrage and employee dissent over its recent proposal to privatize operations and maintenance (O&M) of 14 hotels managed by the Himachal Pradesh Tourism Development Corporation (HPTDC). The plan, which the state claims is aimed at modernizing hospitality services and increasing efficiency, is now drawing severe backlash from employees, unions, and even sections of the local population.

According to official sources, the 14 hotels slated for privatization are among the top-performing assets in the state’s tourism infrastructure. However, what was initially framed as a reformative administrative move has rapidly escalated into a full-blown controversy, with critics calling the decision “illogical, anti-labor, and a threat to public assets.”

The opposition has primarily come from the HPTDC Employees Union, which is warning of a statewide agitation if the government does not reconsider its decision. The employees argue that these hotels are not loss-making but, in fact, are running successfully and contributing positively to the state’s revenue. According to union representatives, privatizing these hotels will not only undermine the tourism corporation’s credibility but will also demotivate thousands of employees who have served diligently for years.

“Profitable Hotels Don’t Need Outsourcing”: Union’s Strong Rebuttal

In a written memorandum submitted to Chief Minister Sukhvinder Singh Sukhu and the Chairman of the Tourism Corporation, the employees’ union expressed its deep concern. Speaking to the press, Rajkumar, General Secretary of the union, stated:

“Privatization of hotels that are generating profits is not only economically unwise but also sends the wrong message to the employees. This is nothing short of sidelining a well-functioning public sector unit to serve private interests.”

The union further pointed out that O&M privatization may lead to exploitative working conditions for current staff, loss of job security, and an erosion of public accountability. There is also concern that once hotels are handed over to private operators, quality and affordability for tourists could be compromised in the name of commercial profitability.

The Government’s Stand: “Modernization, Not Privatization”

The state government, however, maintains that this move is not full privatization but rather a Public-Private Partnership (PPP) initiative aimed at enhancing the operational standards of tourism properties. A senior official from the tourism department mentioned that the decision aligns with broader goals to increase tourist inflow, upgrade facilities, and reduce the administrative burden of direct hotel management.

Despite these assurances, critics argue that without a transparent audit or a proper public consultation, such reforms only fuel distrust and speculation. Many believe that profit-making assets should be strengthened internally instead of being outsourced.

A Larger Battle Over Public Assets?

This is not the first time public sector disinvestment has led to unrest. Similar protests have erupted in other states like Rajasthan and Uttarakhand, where employees have fiercely opposed the leasing or sale of public utilities and services. The issue has now become symbolic of a larger debate on the role of public sector enterprises (PSEs) in the era of privatization.

Experts warn that such moves, if not handled with transparency and stakeholder inclusion, could severely damage both the political capital of the ruling party and the economic ecosystem of the tourism industry — especially in a state like Himachal, where tourism is a backbone of the economy.

What’s Next?

The government has reportedly acknowledged the memorandum and provided verbal assurances that employee interests will be safeguarded. However, the employee union insists that unless the plan is scrapped entirely, they will continue to escalate protests. They have also hinted at seeking support from national-level labor unions to strengthen their campaign.

Political observers now anticipate that the issue may snowball into a larger policy debate in the coming state assembly sessions. Public petitions and RTI applications are also expected to be filed in the coming weeks to demand transparency on hotel performance metrics and the nature of the proposed O&M contracts.

Conclusion

At the heart of the debate lies a fundamental question: Should profit-making public institutions be handed over to private players under the pretext of modernization, or should governments focus on strengthening public services internally? As protests intensify and public opinion splits, the Himachal Pradesh government finds itself at a crossroads — one that could define its policy legacy for years to come.