Hospitality industry appeals to Centre to boost domestic tourism

Hospitality and tourism, both of which took a hit during the Covid-19 pandemic, account roughly for 10 per cent of India’s GDP

The Federation of Hotel and Restaurant Associations of India (FHRAI) has appealed to the Centre to aggressively promote domestic tourism in 2021.

The apex hospitality association has pressed on the need to encourage local tourism under the Ministry of Tourism’s Dekho Apna Desh pledge campaign while the country remains closed to international tourists.

India’s tourism and hospitality sectors have incurred the largest collateral damage of the Covid-19 pandemic and every small or big step to revive the sector will be crucial in the long-term health of both the sector and the country’s economy.

The FHRAI has recommended incentivising domestic tourism by offering tax exemption under 80C of up to Rs 50000 to Indians which will encourage them to travel.

Prime Minister Narendra Modi has always spoken about how important the Indian tourism is to the country, the FHRAI pointed out.

“We believe that with the right kind of messaging and support from the Government, India’s domestic tourism could flourish. Make in India or Vocal for Local initiatives are on the same line as Dekho Apna Desh and there couldn’t be a more opportune time to push the throttle on promoting domestic tourism," Gurbaxish Singh Kohli, vice president, FHRAI said.

"The Government could allow valid GST hotel bills of any State other than the home State of the Individual assessee exempt under section 80C for an additional amount of Rs.50,000/-. The potential additional tax saving will encourage citizens to travel within India and will give impetus to hotels as well as ancillary industries,” he added.

Hospitality and tourism account roughly for 10 per cent of India’s GDP and employs nearly 9 per cent of India’s working population. With zero foreign exchange earnings and less than 25 per cent of pre-pandemic revenues, the sector is facing an existential crisis.

The total loan outstanding to the hospitality industry is approximately Rs 55,000 crore and the value at risk for the hospitality and tourism sector is at approximately Rs10 lakh crore. If favourable initiatives and policies are not drawn for the survival of the sector, at least 40 to 50 per cent restaurants and 30 to 40 per cent hotels in the country will shut down, resulting in millions of job losses.

“Over 26 million Indian nationals travelled overseas in 2019. Right now is the time these travellers can explore their own country. We request the Government to urge people to stay and travel within India. India has some of the best coastlines and beaches in the world, its hill stations and architectural wonders are unparalleled and we also have pilgrimage attractions," Pradeep Shetty, joint honorary secretary, FHRAI, said.

"There is every reason that the domestic traveller should explore their own country and the Government just needs to induce this want to see one’s own country. This will save many small and medium-size businesses from imminent and permanent closure,” Shetty added.