Fraud in hotel star classification unearthed

The Central Bureau of Investigation (CBI) on Tuesday inspected several premises in Kerala as part of a fast-unfolding nationwide investigation into suspected big-ticket corruption in grading nascent hotel projects for star classification.

A four-star or above rating was mandatory for hotels in Kerala to earn a liquor permit. An estimated 50 new hotels were awaiting classification in the State.

The anti-corruption inspections in Kerala reportedly commenced on Wednesday when a CBI team from Tamil Nadu headed off a Union Ministry of Tourism official from boarding a flight at the Nedumbassery Airport in Kochi.

Official’s role

Sources said the Chennai-based tourism official had a prominent role in grading hotel projects based on their location, amenities and other facilities.

Investigators confiscated a set of mobile phones and a computer from the tourism official. However, they were yet to charge him formally.

The seizure reportedly yielded a trove of “incriminating” information and triggered raids on various premises in the State.

Official sources said the surprise inspections overwhelmingly targeted some members of the Hotel and Restaurant Approval and Classification Committee (HRCA) and a set of so-called “hospitality consultants.”

The HRCA also included officials of the Kerala Tourism Department and professionals from various strata of the expansive tourism industry, including tour operators, travel agents, a nominee from the hotel industry and principal of the Institute of Hotel Management and Catering Technology, Kovalam.

Cartel in action

The CBI suspected that at least a few of the HRCA members had formed a “cartel” with “corrupt” Centre and State tourism officials to accord hotel projects the required star classification for a sizeable bribe.

Official sources said that some of the HRCA members, a few of them hoteliers, under the CBI scanner, controlled or indirectly owned private consultancies that offered “advice” to hotels to gain the required star classification for a large fee. They channelled a portion of the payment to other official decision-makers in the HRCA.

The CBI inspections had also yielded a significant amount of unaccounted money. The CBI is also looking into the potential money laundering aspect of the racket.

Star ratings are meant to provide an accurate and objective assessment of the quality of accommodation, food and service provided by hotels. However, the CBI’s exposure of the alleged attempt to fox the classification system appeared to have undermined its credibility for now.

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