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GST effect: Budget hotels preferred over luxury ones

Tuesday, August 8, 2017, 15:00 Hrs  [IST]

As per a report in The Times Of India, a survey released by an online travel portal points out that people might opt for three or four star rated hotels than pay 28% tax. With 28% tax being levied on luxury hotels, GST seems to play a dampener for these hotels. Unlike summer or winter holidays, people opt for luxury hotels during monsoon to stay indoors and enjoy the property and the weather. The impact of GST was visible as 56% of the respondents said that the heavy tax levy has affected their preference for luxury travel. On the plus side, tourists have been saving by booking early, a habit prompted by airline flash sales.

“The sales have led to more than 60% respondents booking their tickets at least 15 days in advance and 69% of respondents preferring to travel by air with less than 20% planning to take a road trip,” said the monsoon survey by About 43% of the 1,500 respondents surveyed said that they intended to spend between INR 2,500 to INR 5,000 per night on hotel accommodation. Only 4.5 % of those surveyed said they would spend between INR 7,000 to INR 10,000 per night. About 32% said they would opt for accommodation that was between INR 1,000 to INR 2,500, indicating that budget travel is big among users of online travel portals.

But when asked what kind of accommodation they would prefer, 10.3% voted for five star hotel accommodations, 38% chose three - four star hotels, 26% went for budget hotels and 23% for home stays. The preference for domestic travel continues during monsoon as well with 72.8% Indians rooting for it. “The North East has emerged as a preferred destination, while Goa and Kerala continues to be the favourite. Europe and Bali are the preferred international destinations,’’ said the survey.

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