Budget 2018: Reactions from Tourism and Hospitality Sector

THE UNION Budget 2018 has proved to be a disappointment for the tourism and hospitality sector. Scanning at the fact that tourism in India accounts for 9.6 per cent of GDP, we do not see any specific allocation for this sector. “According to a KPMG report, the hospitality sector is expected to grow at a CAGR of 16.1 per cent to reach Rs.2796.9 thousand crore in 2022. Despite having Hospitality as an asset at its disposal which can propel the country’s growth, the Government has yet again chosen to ignore its potential," says Dilip Datwani, President, Hotel and Restaurant Association of Western India (HRAWI).

Employment generation which is one of the focus areas for the Government has the biggest support of the hospitality sector. It directly employs over 12 per cent of the Indian workforce and is one of the biggest employers of unskilled and semi-skilled labour.

Rahul Singh, Founder & CEO, The Beer Cafe, President NRAI feels that the Restaurant Industry was eagerly looking at an announcement on re-introduction of ITC for restaurants from the Finance Minister. “Ours is the only industry which does not receive this benefit. We have also been requesting for the introduction of a uniform policy that includes Single Window Clearance and Reduction in no. of Licenses required for operating a restaurant for a very long time. We are an industry worth Rs 3,52,000 crore which is expected to grow to Rs 5,52,000 crore by 2022. For an industry of this size generating over 8 million jobs, it is disappointing to see that no specific announcement was made,” he added.

However, Ajay K. Bakaya, Managing Director, Sarovar Hotels & Resorts commented upon the positive side of the budget in rail infrastructure, Bharatmala project, impetus to farmers, Heritage City Development, and healthcare. He also appreciated the move towards solar energy and operation green but also feels that Rs 60 crore to push airport capacity is too little and nothing concrete has been done to combat pollution.

“The decision to increase airport capacity and improve regional air connectivity is particularly welcome since domestic travel is a major growth driver for the tourism industry. Also noteworthy is the creation of integrated development of iconic tourist circuits, which will involve marketing these destinations on international platforms, augmenting local infrastructure, technology, and skill development,” stated Vivek Bhalla, Regional Vice President, South West Asia, InterContinental Hotels Group (IHG).

Industry experts wished that the tourism sector had received the importance that it truly deserves. “For instance, a uniform policy across India, governing Hospitality & Tourism including an effective single window clearance mechanism for expeditious clearance of projects would have been most appreciated,” commented Vineet Verma, Executive Director & CEO, Brigade Hospitality Services Limited.