With Finance Minister Arun Jaitley slated to present his third annual Union Budget on Monday, here's a look at what the hospitality sector expects from the government.
With Finance Minister Arun Jaitley slated to present his third annual Union Budget on Monday, here's a look at what the hospitality sector expects from the government.
We spoke to various hotel owners to gain a perspective about their expectations from Budget 2016.
J B Singh, President and Chief Executive Officer, InterGlobe Hotels:
The Tourism & Hospitality sector is among the sunrise industries in India and more recently, our Prime Minister has identified it as one of T’s of development. The industry has a come a long way -- from a few scattered hotels in the pre-independence era to the indigenous hotel chains coming to the fore, post-independence, and the boom in the mid-market hotel sector with the dawn of the new millennium. Indian travel and tourism industry contributes nearly Rs.7,000 billion to the Indian GDP. It is expected to grow at a long-term average rate (2014-‘24) of 8%.
This union budget, we expect the government to focus on building a stronger ecosystem for the travel & hospitality industry. Giving 'infrastructure status to the real estate sector and passing the Real Estate Regulatory Bill will certainly give an impetus to the sector. Along with this, a single window clearance for real estate and hospitality development, multi-modal transport and last mile connectivity to promote tourism, as well as rationalising taxation on aviation fuel will spur growth. REITs is a definitive growth-ticket for the hospitality industry, and will allow the common man to share the benefits of this growth; it should therefore be a sharp focus for the government.
Vimal Singh, Managing Director, Golden Tulip Hotels South Asia
In 2016, we expect the government to continue on its growth and development mission. Besides tax relief, passing of the Goods and Services Bill, the real estate sector is hopeful that the Real Estate Bill will get its must awaited approval. Currently, the real estate sector is struggling as an unorganised sector and non-process driven policies.
So, with the go-ahead, we will be able to see a standardisation of business practices, business through single window clearance, bring in transparency and increase domestic and international investment. The implementation of GST bill will eliminate multiple levels of taxation and further reorganise the lengthy approval process that would speed up the project execution in the hospitality sector. The hospitality industry is influential in promoting tourism in India and attracting investments. We hope this time, budget 2016 will fulfil demand of giving infrastructure status to hospitality sector.
Bikram Sohal, Chief Executive Officer and Co-Founder, SavvyMob, a start up that will help you get last minute hotel rooms for cheap.
As a start up, we're looking at a waiver of service tax for the first three years at least, rather than providing tax relief for three years. Most start-ups are not profitable for the first few years so tax relief has no value while service tax has a real monetary impact.
We expect the government to bring about some reforms in bank lending and credit facility for startups. Currently banks are asking for three years audited financials for any type of credit instrument, which a start-up may not have. We expect the government to relax the requirements or develop new programs and instruments for the SME sector.
The Tourism department should also develop a program to promote travel start ups that help increase inbound and domestic travel. This will be a big boost for start-ups as it will help get their brand out in the market.
For the hospitality industry, a tax holiday for the sector and for the airline industry for three to five years will be conducive to drive tourism, specially inbound. Currently, the tax on hotels is 20-25% over and above the room cost, making the leisure hotels prohibitively expensive. It's cheaper to travel to international destinations, a trend that is growing amongst the Indian travellers.
World class road infrastructure across the country will also help people to travel freely and quickly for short and long haul trips. Heritage tourism in India has so much potential, with the country brimming with history and culture. Restore heritage sites and build on heritage tourism.
Pranav Maheshwari Co-Founder and Head of Technlogy, Vista Rooms
With initiatives such as 'Start-up India' and 'Make In India', the startup community is looking expectantly towards the government to bring in notable changes to some policies and clarity on the initiatives announced.
It would help if corporate tax was reduced to 20% against the normal 30%. The government should increase the tax holiday period from three years to at least five years as hardly any startup becomes profitable in three years of inception to actually pay tax.
There should be a greater focus on infrastructure and developing roads, railways and airports, which will provide better connectivity to smaller towns leading to even faster growth in the travel sector. Most tenders require bidders to have a turnover of a few crores in last two to there years. Due to this clause, most start ups are unable to compete with the established players in the bidding process to manufacture products. We need to see some respite here. crores in last two to there years. Due to this clause, most start ups are unable to compete with the established players in the bidding process to manufacture products. We need to see some respite here.
There is an announcement of $1.5 billion start-up fund during ‘Startup India 2016’, we would like to see how these funds are channelised towards us, and would want a clear and quick way to access them, with minimal government or bureaucratic intervention. Also, simpler norms to register a start up would go a long way in helping budding startups during inception."
Aditi Balbir, Co-Founder & MD of V Resorts
Our biggest expectation from the budget this year is for the government to allow greater ease of business. The Centre should look at facilitating our business in India, towards that, firstly, they should have a centralised taxation policy in place. Every state has a separate tax policy and navigating it makes running businesses very tough for us. Secondly, there should be ease of compliance. Even for a four-room property, we need to get 10/12 licenses, such as entertainment, fire etc. We are not interested in reducing the government's revenue, but want them to work towards creating an environment that lets us function and grow without having to navigate such road blocks.
Also, the government need not spend money on promoting tourism, rather, they should focus on making 'running businesses' easy for the private sector. As part of this, they should open up properties under their control to us. They should focus on facilitating and let us do the implementation.
Marifan Gul, Manager, Marketing & Sales, Hotel RK Sarovar Portico, Srinagarnager, Marketing & Sales, Hotel RK Sarovar Portico, Srinagar
If we have the right transportation with hygienic and user-friendly passenger amenities and attractions such as theme parks, more and more tourists will be willing to visit the State. Poor infrastructure is why a majority of travellers prefer other countries over India as they get better value for money there.
The tourism and hospitality industry has time and again mentioned at various forums that strong infrastructure is critical to the opening of the tourism industry in the country. It has advocated for concrete steps to strengthen connectivity and accommodation facilities.
The government needs to look for strategic initiatives to market brand India in tourism market. Apart from showcasing India as an affordable tourist destination, it should also venture into alternate segments such as adventure and heritage tourism. The campaigns need to highlight various aspects to concretise the image of India as a safe and easy destination to traverse.
Quoting the importance of this sector for country’s economy in terms of income and employment generation, the industry stalwarts have been pushing for relaxation in tax norms. The industry has been strongly lobbying for passing of GST tax law, and to add it FAITH has requested the ministry to include tourism and hospitality industry in the lower slab of GST, which it predicts to be between 6-8%. In addition, it has also sought for tax exemption for incentive tourism, adventure tourism, travel agent services etc. When it comes to airlines, the industry is of the opinion that reduction in ATF price should be leveraged. The VAT on ATF should be reduced or made uniform.
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
 "InterGlobe hotels logo")
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
)
){kind=small}
){kind=small}
)
)
)
)
)
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}