HOSPITALITY BUSINESS

THE YEAR THAT WASN’T FOR THE

The year 2017 had everything that made the hospitality sector bleed, Dilip Datwani, President, Hotel and Restaurant Association of Western India (HRAWI) said without mincing his words. But being in this industry for over two decades now, he tries to be optimistic by saying that hopefully the coming year will not be that bad.

He continues the year 2017 started off with the aftermath of demonetisation which continued until March 2017. With no control or say in various regulatory or judiciary decisions taken, the hospitality sector slipped further down. Then there were jolts of Goods and Service tax (GST), famed beef ban dikat and making eateries and restaurants across highways run dry. “It was a tough year. There is no doubt about it. But what makes it worse is the time taken to implement our suggestions across various issues that is hindering growth,” added Datwani. This impact runs across the country, Datwani stressed.

A restaurant owner in Andheri said, “Customers are losing trust on us due to the complicated nature of GST. They thinking we are duping them with extra taxes but we ourselves don’t know for a while which bracket we fall under.” This negative happening is not related to urban India but the tier II and III cities are being squashed as well. Adding to it, Datwani said customer dissatisfaction and lack of confidence on the hotel and restaurant business is at its peak. Yet another small-time restaurant owner who works with an online business said, "The online business are in one tax slab and restaurants/outlets are in different, which is quite confusing." At present, the GST council has kept restaurants away from input tax credit as the council found that the business did not pass the benefits to the customers.

“Government wants us to pass the (GST) benefits but how do we discover the benefits as the systems are not correct.” The GST council reduced GST for restaurants from 18 per cent to 5 per cent recently. But many restaurants had not changed the tax slab on their bills as they claim to lack knowledge about the changing slabs. After all the regulatory implications, losing the trust of the customers was the last nail in the coffin, describes Datwani.

The numbers of Foreign Tourist Arrivals (FTAs) in April 2017 were 7.40 lakh as compared to FTAs of 5.99 lakh in April 2016 and 5.42 lakh in April, 2015, stated IBEF. However, in order to understand domestic tourism in 2017, there is no data made available by the tourism ministry yet. The industry associations feel that a decline of 20-30 per cent, this year (2017) can be expected due to various factors. Surprisingly, the industry which usually sees high demand in November-December is still lustreless. This labour intense sector has seen drastic fall in hiring as well. However, Datwani claimed that people are not really downsizing as this a labour intense sector and requires trained staff. Datwani urged that the government should partner with hospitality business to grow the tourism business together.

2017 started off with the aftermath of demonetisation which continued until March 2017. With no control or say in various regulatory or judiciary decisions taken, the hospitality sector slipped further down. Then there were jolts of GST, famed beef ban dikat and making eateries and restaurants across highways run dry. Customer dissatisfaction and lack of confidence on the hotel and restaurant business is also at its peak