As the Indian economy recovers from the pandemic’s impact, the tourism sector is poised for revival, and hoteliers are urging the government to prioritize key measures related to infrastructure in the upcoming budget to unleash the full potential of the hospitality industry.
M.P. Bezbaruah, Secretary General of the Hotel Association of India, emphasized the need for the government to focus on infrastructure development and tax reforms to support the hospitality sector. With the government setting an ambitious target of attracting 100 million tourists by 2047, there is a pressing need for significant accommodation capacity.
An essential demand from the hotel industry is the grant of infrastructure status. This designation comes with various benefits for developers, including easier access to bank loans, reduced development costs, and tax benefits for projects. Bezbaruah highlighted the importance of implementing last year’s budget proposal to develop 50 new tourist destinations, a move that remains largely unrealized.
To achieve the government’s goal of a $1 trillion contribution to GDP from tourism, Bezbaruah stressed the importance of further development, especially in creating new tourist destinations. The risk of over-tourism in popular destinations like Agra and Jaipur can be mitigated by promoting sustainable tourism through the development of new attractions.
Acknowledging the constraints of a vote-on-account budget in an election year, Bezbaruah expressed hope that the government would consider the industry’s suggestions in the long run. The goods and services tax (GST) remains a significant concern for hoteliers, with the current 18% GST rate on hospitality being higher than in many other sectors. Rationalizing GST could have positive implications for both the government and the hospitality industry.
Another issue in the spotlight is the differential GST rate between restaurants in hotels and standalone restaurants, creating an uneven playing field. Addressing this disparity is crucial for fostering fair competition within the industry.
Revamping the ‘Incredible India’ campaign is also on the hoteliers’ wish list. Inbound tourism is yet to fully recover, and a renewed marketing effort, both online and offline, is deemed critical. Despite the benefits of digitization, traditional offline campaigns remain essential to attract a diverse range of tourists.
The recent reduction in the government’s overseas promotional budget from ₹524 crore in 2021-22 to ₹167 crore in 2024 has raised concerns within the industry. While recognizing the advantages of digitization, Bezbaruah emphasized the importance of regular offline campaigns, citing the successful marketing efforts of countries like Vietnam.
Bezbaruah concluded by expressing the industry’s desire for more attention to be paid to the marketing of India. Upgrading the ‘Incredible India’ campaign is seen as pivotal for attracting tourists, and the government’s support in this regard is eagerly awaited.
As the budget announcement approaches, the hospitality sector remains hopeful that the government will address these key concerns and provide the necessary impetus for the industry’s growth. The success of these measures could contribute significantly to the broader economic recovery and help India realize its tourism potential on the global stage.
