National, January 2024: As the eagerly awaited Union Budget 2024 looms on the horizon, leaders from India’s vibrant hospitality industry are articulating their expectations and aspirations for the fiscal policies that will shape their sectors in the upcoming year. From pioneers in the hospitality and travel segments to restaurant and hotel owners, these industry stalwarts offer a comprehensive outlook, advocating for measures that not only foster growth but also address challenges exacerbated by the recent economic landscape.
Dawn Thomas, Co-founder, VRO Hospitality-
“With demand all-time high in hospitality, we are expecting a transformative year ahead. The upcoming budget holds the key to unlocking innovation and progress. As pioneers in these industries, we approach the budget with optimism, anticipating policies that encourage investment in cutting-edge technologies to enhance guest experiences in our sector and elevate healthcare services. We seek a budget that fosters a collaborative ecosystem, providing support for startups to flourish and contribute meaningfully to the growth of this sectors. A forward-looking budget will not only fuel innovation but also create a resilient foundation for the future of hospitality in our nation.”
Thomas Cook India and SOTC
Madhavan Menon, Executive Chairman, Thomas Cook India Ltd. – “The Travel & Tourism sector represents a vital economic driver: With a 5.8% contribution to India’s GDP (2022) and the government’s target of achieving $1 trillion by 2047, the sector forms a strong force multiplier – across allied sectors, employment generation, and foreign exchange receipts. Our expectations from the Union Budget include key pivots to transform India into a destination of choice:
- Infrastructural Focus: As a key fundamental for the sector, setting up of new airports via private participation must become a priority – thus creating a viable hub & spoke model; also rapid expansion in rail, road, and waterways (sea and river cruises). Additionally, infrastructure development for high-growth areas like religious circuits and underleveraged hidden gems (Lakshadweep).
- Inbound Tourism: revival of the Inbound incentive scheme – but for select destinations.
- Reduced Income tax levels to provide increased disposable income in the hands of the people – a boost for travel & tourism spends
- LTA exemption annually, against twice in 4 years to catalyse domestic tourism
- Standardisation of TCS at 5% on foreign travel packages (against the current 5% and 20% slabs).
- Clarity wrt TCS on Forex card payments
GST is a key area and our wish list for Budget 2024-25 includes:
- Allow GST input credit facility for inbound and domestic tourism
- Centralise similar issues faced by a single assessee in multiple states – reducing unwarranted time, efforts, and litigations in multiple jurisdictions
- Simplify the compliance mechanism in filing reports, reconciliations, and audits”.
Vishal Suri- Managing Director, SOTC Travel – “SOTC Travel advocates for a multi-pronged approach. Albeit interim, the Union Budget offers significant opportunity as a growth accelerator for the travel & tourism sector – a valuable contributor to the country’s GDP and a powerful employment engine. Our ask is a multi-pronged approach:
Coalesce the TCS rate on outbound tours into a single 5% slab to reduce the significant advantage enjoyed by international competitors (exempt from this levy).
Remove the deterrent to technology – in the form of the current TDS that is levied on automated bookings (self-booking tools) for internal/closed user groups such as our Business Travel platforms. This would align with the government’s commitment to ease of doing business and digital adoption, and the larger objective of building a Digital India. We are confident of the government’s continued focus on expediting infra development, especially the extension of its Udan Yojana and Vande Bharat routes that ensure regional access and affordability. Connectivity to remote but viable tourism areas creates vibrant new circuits plus meaningful employment that uplifts the entire ecosystem. Incentives that promote sustainable travel and tourism are now a critical task as we endeavour to preserve our planet for future generations.”
Gola Sizzlers, Cafe Hawkers and Sambar Soul Restaurants
Manik Kapoor, Director of Gola Sizzlers, Cafe Hawkers and Sambar Soul Restaurants: Anticipating the upcoming budget, Gola Sizzlers hopes for a revamped liquor licensing process, coupled with reduced fees. Additionally, support in the form of subsidies for local food sourcing is essential to tackle rising procurement costs. We also look forward to taxation adjustments and incentives to foster sustainability, paving the way for a more robust F&B industry.
Rajat Kapoor, Director of Gola Sizzlers, Cafe Hawkers and Sambar Soul Restaurants: As the industry embraces digital evolution, Gola Sizzlers seeks government support for technological upgrades. This includes financial assistance or tax breaks for adopting digital payment systems, online ordering platforms, and modern kitchen technologies. Furthermore, we believe training and employment programs are key to elevating service standards and creating more job opportunities in the hospitality sector.
Mehul Sharma, Founder & CEO, Signum Hotels & Resorts
‘The hotel sector, a cornerstone of hospitality, is looking to the budget for a hearty serving of fiscal goodies. There’s chatter about the possibility of reduced GST rates, which currently sit like an uninvited guest at a wedding feast, eating into profits. Moreover, the industry advocates for a smorgasbord of financing options, including the extension of the Emergency Credit Line Guarantee Scheme (ECLGS) to help them recover from the pandemic-induced financial hangover. We also expect the – Subsidized loans for hotel construction and renovation; Enhanced depreciation on hotel buildings to encourage refurbishment and Tax holidays for new projects, especially in less explored regions. “Infrastructure status” for the hotel industry is badly required. More support to the new hotel brands in terms of lower lending rates and more services is needed.
A reduction in food licensing fees is one of the highly anticipated garnishes along with easier compliance norms that don’t leave a bitter aftertaste. Streamlining of multiple licenses into a single-window system, incentives for adopting digital payment systems, and initiatives to support local food industries and farm-to-table supply chains are need of the hour. There is a strong desire for infrastructure development funds that could connect the lesser-known jewels of India’s tourism crown. Additionally, there’s a call for marketing grants to put India on the global map as the go-to destination; after all, even the most exotic destinations need a good PR strategy. Investment in improving connectivity to offbeat destinations, boosting the ‘Incredible India’ campaign to attract international tourists, Implementation of the Prasaad Scheme and Special attention to heritage sites for conservation and tourism development.
Last but not least, there needs to be a two-way channel of communication between the Ministry of Tourism & Hotel fraternity to explore ideas and opportunities to grow together.’
Manish Rathi, co-founder and CEO, IntrCity SmartBus
As the 2024 budget announcement approaches, we are focused on driving significant improvements in the private bus sector, which is projected to be the dominant mode of long-distance public travel in India.
While the Government has done a remarkable job in the development of the highway networks across the country, this has set the stage for now creating a framework for the development of essential public transport infrastructure, to help drive consumer adoption. The lack of convenient boarding infrastructure is one of the biggest roadblocks in shifting travellers from private cars to public transport.
Along the lines of airport development, we would request the Government to consider a budgetary framework for the development of centralized bus terminals on national highways, which can be used as transit points for inter-city passenger movement. We believe that this can be a significant game changer for India, and has the potential to be the global leader in promoting the adoption of public transport worldwide, where private cars tend to dominate the landscape.
Second, for historical reasons, passenger buses are not allowed to carry commercial cargo. This is a national waste, as modern vehicles have spare storage space and adequate engine capacity, which can be used to carry the cargo at marginal extra cost. Both the Railways and airline industry already do so. We request the Government to allow carrying of commercial cargo in passenger buses which will eliminate the wastages on unoccupied space, and also help reduce the cost to consumers.
Mr Gaurav Shetty , Managing Director , MRG Group
“The upcoming Union Budget 2024-25 is of immense importance as the hospitality industry has recovered from the setback caused by the pandemic and now is expected to grow manifolds in 2024. The present government has been making a lot of efforts for infrastructure improvement across the country, including highway development and strengthening regional air connectivity. We expect similar announcements in this year’s budget that will focus on improving infrastructure in tier-II and tier-III cities of India. The hospitality industry has been advocating for infrastructure status for many years now and I hope that the government considers this key demand in this financial year. An industry status will mean that hospitality companies will be able to avail benefits like capital and interest subsidies besides paying power tariff at industrial rates against the requirement of payment at much-higher commercial rates. This will help to reduce costs of hospitality projects which are capital intensive and thus encourage further investment in the sector.”
Simranjeet Singh, Director, CYK Hospitalities-
“As restaurateurs, we anticipate a pre-budget focus on vital aspects affecting our industry. The current high GST on raw materials poses challenges, limiting the benefits derived. We hope for a revision to make it more conducive for growth. The cumbersome process of obtaining licenses for bars and restaurants requires streamlining, fostering a business-friendly environment. Additionally, the restoration of the Input Tax Credit (ITC) system would be a significant step in supporting the sustainability and prosperity of the restaurant sector. We look forward to measures that promote ease of doing business and contribute to the industry’s overall development.”
Mr. Sumit Prakash, Country Director, India and South Asia, Collinson-
“We are optimistic about the potential for impactful economic measures being introduced by the Government to enhance India’s travel and hospitality infrastructure.
Initiatives like the introduction of new airports, new terminals at existing airports and expansion of flight routes, coupled with the growing popularity of domestic destinations, also represent substantial new opportunities that are unfolding in India.
Since the return of travel last year, we have already seen more Indian travellers placing a heightened value on travel experiences as well as travel related rewards and benefits. Policies and incentives that help to enhance travellers’ experiences can effectively give the sector an even greater boost.
Businesses are now presented with more opportunities to leverage the growth of the travel industry by designing strong, travel-experience focused customer engagement propositions that serve to engage and build stronger relationships with their most valued customers.”
Mr. Yogesh Mudras, Managing Director, Informa Markets
“As we stand on the brink of Union Budget 2024, the Travel and Tourism sector emerges as a dynamic force, contributing INR 16.5 trillion in 2023 and projecting around 20 trillion to the GDP by 2030. With a remarkable 44% YoY increase in the demand of skilled workers, this sector is a robust employment generator. To position India as a global leader in the tourism market, we recommend implementing visa-free entry for tourists from top fifteen source countries. This strategic move can significantly boost foreign tourist arrivals, benefiting the entire tourism value chain and increasing job creation. Additionally, incentivizing eco-friendly practices, rectifying disparities in OTAs (Online Travel Agencies) and reducing GST rates are crucial steps for the sector’s sustainable growth.
Furthermore, acknowledging the pivotal role of MICE (Meetings, Incentives, Conferences, and Exhibitions) tourism, it is emphasised MICE is growing at a rate of nearly 20% per year, and with significant investments flowing in from leading global tourism agencies, India will soon become a prominent MICE destination in the coming years. Moreover, the MICE tourism market size is expected to reach $13.4 billion USD by 2031. To strengthen MICE tourism, the budget should allocate funds for promoting eco-friendly accommodations and tourist sites. Introducing incentives for industry players aligned with the MICE sector will enhance sustainability and drive growth in the global landscape.
As the organisers of trade expos, Informa Markets plays a proactive role in fostering business, leisure, and the travel industry through the events like SATTE, we strongly recommend budgetary measures that empower and strengthen India’s tourism sector. These provisions will enhance its global competitiveness and contribute to inclusive growth.”