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UNION BUDGET 2018-19: Industry Reactions

Thursday, February 1, 2018, 15:31 Hrs  [IST]
HBI Staff | Mumbai

In the recently concluded Union Budget 2018-19 that focused on agriculture, health, senior citizens, rural infrastructure and tourism... the HoReCa industry fells being ignored completely in the about 2-hour long budget speech by Finance Minister Arun Jaitley. Hospitality Biz received disparate reactions from the Hospitality and Travel industry professionals. Excerpts as follows...

Ajay K. Bakaya, Managing Director, Sarovar Hotels & Resorts
The positives in the budget are rail infrastructure, Bharatmala project, impetus to farmers, Heritage City Development, and healthcare. The move towards solar energy and operation green are welcome. However, 60 crore to push airport capacity is too little and nothing concrete has been done to combat pollution. The lack of relief in taxes to companies with a turnover of below 250 crores and taxing long-term capital gains are also in the negatives.

Gaurav Dewan, COO & Business Head, Travel Food Services
The Union Budget 2018, presented by Finance Minister Arun Jaitley, exceeded all our expectations. The renewed focus on air, rail, and road connectivity in the country, in the budget, is commendable and should be a great boost to overall growth. The expansions under UDAN and Bharatmala initiatives augment our faith in the Government’s belief in developing the travel segment to become at par with the best globally. With 56 unserved airports being brought into the fold as part of UDAN, TFS is positive to achieve a stronger double-digit growth trajectory in the coming year in conjunction with the growth in aviation segment.

Dilip Datwani, President, HRAWI
The hospitality sector has been once again almost entirely  ignored in the Union Budget. What the Government needs to realise is that Incredible India will be a success only when the Hospitality industry, which is a key driver to our economic growth gets right attention. Developments in ancillary sectors like infrastructure and aviation are certainly positive but that alone isn’t adequate. Promoting and encouraging investments in hospitality can place India on the map of the tourism destinations of the world.

J.B Singh, President and CEO, InterGlobe Hotels Private Limited
Overall, the budget points towards a more progressive future. Several initiatives from the infrastructure standpoint will help boost growth and in turn impact tourism positively. Primary among these are the proposed plans of improving intra-city train networks in Bangalore and Mumbai as well as completion of close to 9,000 kilometres of national highways. Additionally, the budget also provides a huge boost to the aviation industry with plans of increasing the number of airports to almost five-fold from the current numbers. This will increase mobility for the entire nation and in turn, provide a major fillip to tourism. On the financial side, reduction in the corporate tax rate to 25% for companies under the 250-crore turnover mark will likely increase re-deployment of capital among SMEs; this in turn should increase travel and further boost hotel and tourism-related growth.

Rakshit Desai, Managing Director, FCM Travel Solutions, Indian subsidiary of FCTG, Australia
Introduction of several initiatives to improve infrastructure facilities in Union Budget 2018 bodes well for travel and tourism sector and will help reinforce India’s image as a tourist destination internationally. Significant investments to address concerns around connectivity with impetus on development of highways and arterial roads, railways and airport infrastructure is bound to push inbound arrivals. A dedicated focus to promote seaplane activities in the country, along with development of heritage sites and iconic tourist destinations will further enhance appeal of India as a destination of choice. ‘Namami Gange’ will provide further fillip to religious tourism from both domestic and international travelers.
 
Overall, it is a budget with a developmental agenda and could have benefited the tourism sector little more with announcements around simplified GST along with detailed FAQs for the travel industry.


Nikhil Ganju, Country Manager, TripAdvisor India
Having great infrastructure is critical to the growth of tourism in a country. The government’s focus on investing in airports to cater to one billion trips in a year is a welcome step and will help in making destinations more accessible to travellers – domestic as well as international. The development of prominent tourists sites into iconic tourist destinations is another step in the right direction and one which will raise India's appeal as an international tourist destination.  


Rishi Puri, Vice President, Lords Hotels & Resorts
Undoubtedly infrastructure development and improving connectivity will help the tourism sector however with no specifics spelled out, we are not exactly sure how it could benefit the hospitality sector. We were hoping to hear from the Finance Minister reforms on taxation which would have made Indian tourism competitive with neighbouring tourism countries. While ease of living has been given importance to, and which is great, ease of doing business remained a dormant subject. This year’s Budget has fallen short of expectations for hospitality.                                                                                                           

Balu Ramachandran, Head of Air and Distribution, Cleartrip
India has achieved the position of being the fastest growing domestic aviation market in the world. Airport capacity addition in most imperative to ensure that the growth impetus does not hit an infrastructure roadblock and it is heartening to see the government backing up the ambitious UDAN plan with budgetary provisions for airports.

Rahul Singh, President, NRAI 
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 number of Licenses required for operating a restaurant for a very long time. We are an industry worth INR 3,52,000 cr which is expected to grow to INR 5,52,000 cr by 2022. For an industry of this size generating over eight million jobs, it is disappointing to see that no specific announcement was made.

Ritesh Agarwal, Founder & CEO, OYO
This year's Union Budget stood for entrepreneurship, employment and quality of life. The announcements made today will benefit MSMEs, including small hotels. At OYO, we have a network of over 3500 exclusively controlled hotels in the MSME sector and we believe that the budget presented will facilitate the growth of our partners. The Mudra Loan allocation of INR 3 lakh crore will help in enabling SMEs to generate more jobs while creating thousands of new entrepreneurs too. One major change which we were expecting was GST being levied on the actual price rather than the declared tariff for hotel accommodation. We'll continue to engage with the government to make this happen which will leave no room for litigation and benefit the hospitality industry.
 
The government's decision of developing 10 model destinations across India and investing in strengthening the country's airport network and infrastructure will boost the tourism sector.
 
The reduction of corporate tax is a welcome move but we are hoping the limit to be pegged higher than INR 250 crore so as to benefit more corporate entities.

Sarbendra Sarkar, Founder & Managing Director, Cygnett Hotels & Resort
The Union Budget 2018 is laid for the grass root people of India. This budget has taken several measures to boost the Infrastructure Proposal to develop 10 prominent tourist destinations as an Iconic tourism destination, is certainly a welcoming move and positive for the hospitality sector. Developments in ancillary sectors like infrastructure are certainly positive for hospitality and tourism. Also, this great move towards the infrastructure could help the government’s initiative – “Incredible India”- see global success.

However, all eyes were at the government to come up with a dedicated corpus to promote tourism, as the budget comes before the polls the government has focussed on the social sectors more. There itself, a fair amount has been announced for the railways as well as the revision in taxes is a big benefit to the sector. Indian Railways is blessed with INR 1.48 lakh cr to raise its carrying capacity and improve the train travel experience whereas Bangalore’s Suburban rail project received INR 17,000 cr financial support in this budget.

Moreover, the move to expand UDAN (Ude Desh Ka Aam Nagrik) to over 56 unserved airports and 31 unserved helipads will open up huge opportunities for the travel industry. And 100 monuments and 600 railway stations to be upgraded with enhanced facilities with better intercity travel infrastructure will lead to warm tourist experience. These positive steps towards transport will make India tourist-friendly which will also drive inbound tourism in the country.

Anil Kumar Prasanna, CEO, AxisRooms
Budget ignored the large concerns of Hospitality Industry & Tourism this year, but we received two positive outcomes of which raising airport capacity is in the right direction to boost traffic to hotels and travel industry which is a welcome step. The second aspect is improving top ten tourism destinations to make it an Iconic destination that would help us drive more investments into these locations.

However, lowering GST slabs were not addressed for the Hospitality Industry which is one of the important concerns.

Chander Baljee, Managing Director, Royal Orchid Hotels
This is an inclusive budget with prime focus on agriculture, healthcare, education and infrastructure sector. Though there is no direct mention of hospitality sector in the proposed Union Budget, however, various measures to enhance disposable income and the government’s plan to increase the airport capacity to handle one billion trips a year will augur well for mid-segment hotels.
 
The conversion of 10 prominent tourist destinations as iconic and model destinations will boost the hospitality and tourism sector in India. The scheme to magnify the visitor experience at 110 Model Monuments under the Archaeological Survey of India (ASI) under the National Heritage City Augmentation scheme of the government will help develop properties in these destinations by keeping their heritage in mind. We at Royal Orchid Hotels have started expanding our properties to Tier-II and III cities. Increased investment in infrastructure will help boost travel among the masses thus increasing the business for hospitality and tourism sector. 

 
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