Key Sectors and Expectations: The tourism and hospitality sector, crucial for economic growth, eagerly anticipates the Union Budget 2024. The industry seeks reforms from the new government to support its expansion and sustainability. Pradeep Shetti, President of the Federation of Hotel and Restaurant Associations of India (FHRAI), shared insights on the industry's expectations and demands.
Election Impact and Vision for 2047: The continuation of the previous government, which had set a vision for 2047 aiming to welcome 100 million foreign tourists and generate $450 billion in tourism revenue, is seen positively. The hospitality sector expects reforms aligned with this vision to boost tourism's contribution to GDP and employment.
Infrastructure Status and Investment: A significant demand is to grant infrastructure status to hotels with project costs of ₹10 crore and above, regardless of location. This would ease funding issues and reduce the long gestation period for return on investments, fostering industry growth.
GST Reforms: The industry seeks the abolition of the 18% GST on hotel rooms costing ₹7,500 and above, proposing a merge into the 12% GST category. This change would reduce costs and complexity, benefiting both hotels and customers.
Concurrent List Inclusion: To streamline growth and ease of doing business, the industry recommends including the hotel and hospitality sector in the concurrent list, facilitating shared governance between states and the central government.
Consumer Trends: Post-pandemic, domestic travel has surged, driving the industry's recovery. Key trends include:
- Increased domestic tourism
- Rising popularity of religious tourism
- Growth in solo travel, especially among women
Technology and AI: The sector is exploring AI integration, primarily in reservations and data analysis, though privacy and security concerns remain.
Government Support: With the Prime Minister's focus on the tourism vision for 2047, the industry is optimistic about forthcoming reforms and measures to support its goals, including increased hotel room availability and improved credit access.
Conclusion: The hospitality industry is hopeful that the Union Budget 2024 will address its demands, paving the way for significant growth and contribution to the economy.
