Government Policy Initiatives
To propel this growth currently witnessed in the hospitality sector, the government has laid out several policy initiatives like:
Rationalization of Taxes Reducing overall costs for tourists
o Removal of 10% expenditure tax on Room rent and F&B and abolishment of the inland travel tax of 15%
o Reduction in customs duty on imported liquor
Eligibility to set-off past losses if hotel companies merge Acquisitions are now more cost-effective to increase capacity
Open-Sky policy with ASEAN region, USA and the United Kingdom allowing foreign airlines landing rights within India Boost arrivals and tourist traffic; international airlines have added over 4,000 seats a week on international routes to India. Capacity increases will bring in more international arrivals and also reduce airfares to/from India
Reduction in excise duty on aviation turbine fuel to 8%
Infrastructure development Key to boost tourism
o Construction of the Golden Quadrilateral: Over 10,000 kilometers of high quality roadways
o Treat convention centre’s as a core infrastructure investment, will now allow it to fund convention centre development Another driver for international traffic and hotel room demand
o Substantially upgrade 28 regional airports in smaller towns Improved connectivity
o Upgraded national highway system Allow development of budge hotels alongside these highways
o Disinvestment in state owned ITDC Hotels
Strong India Marketing initiative Helped India become one of the most favored tourist destinations
Expressed interest in hosting sporting events like Asian Games, Commonwealth Games and Formula One racing Boost to tourism in the region
REEF Research in their “Building up India” report, states that India’s investment market is still underdeveloped as the total stock of commercial real estate is worth an estimated US$ 300 billion. However, a mere US$ 83 billion is classified as suitable for investment...