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Industry Experts Sharing Insights on Budget Expectation
Mehul Sharma Founder & CEO, Signum Hotels and Resorts As I look at the budget expectations for the hospitality sector, several key areas stand out that could significantly boost our industry. Firstly, a reduction in GST
Mehul Sharma
Founder & CEO, Signum Hotels and Resorts
As I look at the budget expectations for the hospitality sector, several key areas stand out that could significantly boost our industry. Firstly, a reduction in GST from the current 18% to a more manageable rate could provide much-needed relief, allowing us to reinvest in our properties and enhance guest experiences. Implementing tax holidays and lowering the cost of electricity would also help manage operational expenses more effectively, making our sector more competitive.
Granting the hospitality industry infrastructure status is another critical move. This change would ease access to loans, facilitating expansion and improvement projects. According to industry reports, ease of financing could lead to a 15-20% increase in new hotel developments. More disposable income means more people will travel, boosting both inbound and domestic tourism.
Infrastructure development, such as better roads and highways, is essential. Improved connectivity will make it easier for tourists to explore different regions, potentially increasing domestic travel by 30%. Incentives like more LTA benefits could further encourage domestic tourism, which currently contributes around 88% to the total travel and tourism GDP. Additionally, visa-on-arrival for more countries could attract more inbound travellers, with a target to increase foreign tourist arrivals by 25% in the next five years.
By addressing these areas, we can create a more vibrant, accessible, and prosperous hospitality sector, benefiting not just businesses like ours but the entire economy.
Rama Mahendru
Country General Manager- India, Intrepid Travel
“Inbound international travel has grown in the last decade in India and still has huge potential. It will get a further boost with the support of the upcoming budget that prioritises the necessities, such as hygienic public spaces and increased security awareness, to guarantee that foreign guests have a great time.
The government must undertake a pan-India campaign like Dekho Apna Desh to educate the people to respect and care for our tourist places and destinations. Also, the government must create awareness about less-visited places for tourism purposes to reduce the excess burden of tourists at already popular places.
The Union Budget 2024–25 must re-emphasise the transformative power of tourism and the pivotal role infrastructure plays in shaping our global appeal. The government must encourage initiatives like rewarding the businesses that are bringing in foreign money for the country and including incentives for the inbound tour operators under foreign trade policy demonstrating our dedication to international collaboration. The government must aim to make our country the first choice for global travelers for adventure tourism which could boost our economy and assist in job creation and employment in local regions and destinations”
Kush Kappor
CEO , Roseate Hotels & Resorts
“The forthcoming budget offers a vital chance for the hospitality sector as we believe this is the Golden period for Indian Tourism Industry in case we are able to make the Best use of this opportunity. We request the government to announce industry status for hotels and lower the GST rate from 18% to 12%, bringing it in line with international standards for the tourism industry. This combined advantage will stimulate investments, enhance tourism, and generate job opportunities. The much needed industry status will enable much easier access to cheaper loans for expansion and development. There should be a provision for single window clearance for approvals, a long standing demand from the hotel industry. Government can also lease old properties such as Havelis and hotels for long term, to benefit tourism industry through Public Private Partnership (PPP) model. Given the industry’s substantial contribution to India’s GDP and foreign exchange earnings, we believe these steps will drive economic growth and position India as a more competitive tourism destination. “
Vishal Vincent Tony
Managing Director at Ayatana Hospitality Pvt Ltd
“Innovative tourism initiatives must align with sustainability goals through the implementation of incentive schemes, such as investing in renewable energy and developing sector-specific policies to drive business growth. Tax breaks for operational expenses and improved access to credit can further bolster industry innovation. Also, this year’s budget for tourism is highly anticipated as over the next 12-18 months, an estimated plethora of jobs are expected to be generated in the hotel, restaurant, and tourism sectors. This further adds to the sector’s demands towards gaining ‘Industry’ status.
The government’s substantial investments in tourism infrastructure and resources, including airports, underscore India’s potential as a pivotal market. In such a scenario, it becomes interesting to see what the budget has to offer to the tourism industry this fiscal year. India’s burgeoning domestic travel sector presents a compelling case for increased budgetary allocations. With robust growth expected in both travel expenditure and air passenger traffic, strategic investments in infrastructure, connectivity, and tourism initiatives are imperative. Adequate budget provisions such as reduction in the GST imposed on the sector and introduction of a more streamlined regulatory framework can not only foster economic growth but also bolster job creation, enhance tourism infrastructure, and capitalize on India’s potential to become a global leader in domestic travel markets.”
Nilisha Ghuliani,
Vice President, Clarks Exotica Convention Resort and Spa
The Indian hospitality sector is anticipated to have a promising 2024 as the nation is witnessing a surge in domestic tourism: ranging from weekend getaways and sustainable wellness stays to Grand Weddings and spiritual journeys.
The domestic travel is flourishing and the industry is experiencing key innovative trends like redefining dining and accommodation for digital nomads, Robots, menu visualisation via VR, the rise of wellness and spiritual tourism which will be the talk of the year & ofcourse a consistent rise in RevPARs.
As part of the Hospitality Industry and the Brand Ambassador for Clarks Exotica Convention Resort & Spa, Bangalore – the Utmost & Prime Expectations from the honourable finance minister in the interim budget would be :-
Tax Rationalization is important : Will just give an example, a room night costing INR 10,000 falls under the 18% GST rate, while an off-season rate of INR 7,000 falls under the 12% GST rate.
A transformative reduction of GST from 18 percent to a globally competitive 12 percent is not only crucial for enhancing India’s allure in
international tourism but will also greatly help in simplifying the Compliance processes. So we become globally competitive if this aspect is looked into.
GST credit for hotel construction : The absence of GST credit for hotel construction poses a significant obstacle requiring urgent resolution to unlock the industry’s vast potential
Approvals to be simplified for efficient Growth : The hotel industry faces a cumbersome and costly challenge due to the need for numerous licenses. Streamlining this process by implementing a single-window system for all approvals, coupled with a time-bound framework, will significantly boost efficiency and economic viability.
This simplification will foster swift progress and expansion in the hotel sector
Hospitality Industry should be incentivised in case they adopt Sustainable practices: Going Green is Expensive – The Government should support the Industry in this movement
Streamlining GST Registrations for Online Travel : Online travel agents in India are burdened by the requirement to obtain state-wise GST registrations, which involves establishing a physical presence in each state and incurs high administrative costs. Allowing OTAs to register in states through their central head office would alleviate these burdens, streamline operations, and enhance efficiency. This change is also necessary to ensure a level playing field with international competitors not subject to similar regulations.
Skill Development : Last but not the least some initiatives for skill development and trainings programmes should be available for Hospitality Employees to help Hotels/resorts enhance their Service Standards – some subsidies could be granted to Hoteliers who are ready to invest in associate training & development
Abhishek Sinha
Co-founder, GoodDot
As a representative of the food sector, particularly in plant-based proteins and alternatives space, I have high expectations for the upcoming budget. It is vital that the government rationalizes the GST on plant-based foods, reducing it from the current 18% to align more closely with the 0% – 5% rates applied to most meat products.
Furthermore, promoting the export of plant-based products from India should be a priority. This will enable Indian agricultural products to reach global markets in a value-added form, boosting our export potential.
The plant-based sector holds significant promise for both sustainability and health. Therefore, I urge the government to consider a separate Production-Linked Incentive (PLI) scheme for this industry. Such measures will not only support the growth of plant-based alternatives but also contribute to a healthier and more sustainable future for India.
Vandita Purohit
Founder, Mauji Cafe & TraWork
Regardless of the final budget, I expect that it should provide clear and accessible information for the general public, women entrepreneurs, startups, MSMEs and all other sectors. It’s crucial that they understand how the budget can benefit them and how they can access these benefits.
Tushar Parihar
Founder, Kaner Bagh – A Heritage Boutique Hotel
I am eagerly anticipating this year’s Union Budget, hoping it addresses the critical needs of the hospitality sector. Our industry has faced unprecedented challenges, and we expect measures that will facilitate recovery and growth. I expect the ministry to decrease the GST rates across all hotels and also prevent confusion among the public by delinking restaurant tariffs from room tariffs. We look forward to the government’s continued support for the hospitality sector in this year’s budget.
Davinder Juj
General Manager Eros Hotel New Delhi
The hospitality sector, one of the most crucial industries for generating employment and one of the biggest contributors to the country’s GDP has been showcasing substantial growth prospects for last two-three years. In order to ensure the continued development of the sector, we expect the government to include allocating funds for essential infrastructure development, reassessing the current tax structure to boost the demand coming from both domestic and international market, increasing budgetary support for tourism promotion, enhancing digital infrastructure, and encouraging sustainability initiatives. We also hope the finance minister to earmark resources for skill development and establish robust training infrastructure for the sector. By empowering the workforce, stimulating job creation, and building a skilled talent pool, the government can strengthen the foundation of the hospitality sector. This strategic focus on human resource development will not only support the industry’s expansion but also positively impact India’s economic landscape by fostering innovation, excellence, and long-term sustainability. Moreover, there is a longstanding recommendation from the industry to grant infrastructure status to the sector, and we hope the Finance Minister will take steps in this direction to further enhance the sector’s growth. Additionally, there is an expectation to implement a uniform GST rate for the hospitality industry to streamline the GST chain and boost inter-state corporate demand.
Virender Razdan
General Manager of The Leela Bhartiya City Bengaluru
Boosting Hospitality – Increased Skill Development Funding and Infrastructure Status to Drive Industry Growth
“The post-pandemic boom in travel is a welcome sight, but it exposes a critical fault line in the hospitality industry – a staggering talent shortage. We’re looking to fill millions of positions in the coming years, yet the applicant pool simply hasn’t kept pace. To bridge this 55-60% gap, we urge the government to invest in hospitality training programs and create a more attractive work environment for young minds. By fostering a skilled workforce, we can ensure a sustainable future for Indian hospitality and capitalize on this exciting growth opportunity, and of course support India enter the $5 trillion GDP club. Hence, an increased budgetary allocation for hospitality skill development programs is crucial to bridge the talent gap.”
“The recent travel boom presents a golden opportunity, but to truly unlock our potential, we need the government to strategically recognize hospitality as an industry and grant infrastructure status to hotels exceeding a certain bar. This will catalyze access to long-term financing at lower interest rates, streamlined regulations for faster project execution, and potential tax breaks for the industry. This isn’t just about filling rooms – it’s about transforming hospitality into a magnet for investment.”
“Infrastructure status creates a win-win: it incentivizes developers, lowers the cost of capital for new projects, and ultimately fosters a more vibrant hospitality sector that contributes even more to our nation’s GDP, job creation, and foreign exchange earnings.”
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