Budget FY25: Hoteliers Expecting Lenient Tax Structure, More Allocation

Hoteliers are expecting a more lenient tax structure and an increased allocation in Union Budget 2024-25, which will give a boost to the tourism industry.

Amandeep Singh Grover, General Manager of Hilton Goa is hopeful of reforms that standardize offerings within the tourism sector.

"This could involve streamlining processes, enhancing infrastructure, and ensuring a consistent and high-quality experience for tourists. Standardization would not only elevate the overall appeal but also position the country as a more enticing destination for travellers, ultimately driving growth and sustainability in the hospitality sector," he said.

Also, a more lenient tax structure would make hospitality services more accessible and attractive to tourists.

"Outbound tourism is rapidly picking up especially with many countries implementing ‘visa-free’ or ‘visa-on-arrival’ strategies, it is important for us to be competitive and relax taxation and make it lucrative for travellers,” he added.

Shilpi Khanna, General Manager at Hyatt Centric, Juhu said, "Operational costs in hotels are a big challenge for us. As costs rise, people's spending power will decrease because of inflation,”

Khanna noted that the hospitality industry was the worst-hit sector during the COVID-19 pandemic. 2023 was a good comeback year for the sector, but it still could not cover the losses.

“Our appeal to the government is to please look after the taxation policy of the country. We are looking for lower income tax for the smoothness of the business,” she said.

Khanna suggested that the government should relax taxes on LTAs (Leave Travel Allowances) so that travel and tourism are encouraged, which will provide a big boost to the hotel industry.

She also called for an increased budget allocation for the industry.

Harkaran Singh Seth, General Manager of Radisson Blu Mumbai International Airport said, “The hotel industry is the seventh pillar of the country. There should be multiple bodies to look after the hotels for ease of business. There should be a single window for approval of our projects, for faster implementations. It will create easier ways for cash flow and contribution towards the economy.”

Singh said that easier loans will create more opportunities for the industry. He emphasised on increasing the budget allocation for the sector, saying that the allocation should be increased to Rs 3,000-3,500 crore.

“Reducing LTA would help every employee for the future. Domestic tourism should also be increased by the government,” Singh added.

He also emphasised on a single-window approval system.