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Costly inconsistencies

Thursday, September 7, 2017, 13:01 Hrs  [IST]

Strange are the ways of our constitutional system and still stranger are the ways with which people who are entrusted to interpret and pronounce orders on important matters. The way our acclaimed justice system ordered blanket ban on all liquor-related businesses close to Highways and then went on diluting the whole spirit of its own order while considering various petitions by states and private industry, makes even a layman flabbergasted at the inconsistencies that prevail in our system. Who suffers due to these inconsistencies? It’s definitely not the rich and mighty, but the salaried middle income groups who rely on these businesses for sustenance.

Amidst these inconsistencies, the hotel industry in the country has had a fairly good time in the first quarter, if the financial results of the biggies of the industry are anything to be believed. ITCs, Oberois, Tajs, ROHL, all performed well in the first quarter. Even, the smaller resort owners are also seemed to be benefiting from the ‘uncertainties’ of a different order in many states! As political poaching is a new trend in many states in India, hotels and resorts in remote locations are becoming safe havens for political parties to keep their lawmakers together from the ogling eyes of the poachers. As the political trapezium is expected to heat up in the run up to the 2019 general elections, it will certainly pay dividends if hotels keep their sales strategy ready to tap this niche segment in the coming months.

Although GST rates are fixed for once and forever, there are many of uncertainties and inconsistencies as regarding its fall out on the various verticals of travel, especially the MICE segment. While there is a section which believes that corporate events, meetings and conferences will stop flying out of the country for the lure of input credits, there is another section which believe GST rules will dampen the atmosphere for hotels and resorts in far flung areas as events will concentrate in key cities where companies are registered to avail input credits. If that is the case, consultants and investment watchers believe demand for hotels to pick up creating demand over runs, triggering another spell of investments in the industry in key cities. Who will prove right is still uncertain!

Finally, if the grapevine is right, it is going to be another spell of political inconsistency waiting to happen at Transport Bhavan with Prime Minister all set for next cabinet reshuffle where he has a lot of new partners to accommodate. Will state’s interest prevail over the national interest in tourism is quite uncertain now!

P Krishna Kumar
Assistant Editor

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