No respite for hotels

GST is imminent, and while taxes have to be paid, hoteliers were in for a rough deal with 28 per cent GST slab for room rent over ` 5000 per night. While associations did submit their concerns and recommendations to the Finance Ministry, the GST Council in their meeting on June 11 did not pay any heed to their pleas. Despite reducing GST for 66 commodities, the government was unable to see the hotel sector as a provider of infrastructure instead of a source of luxury. High taxation aside, the hotel industry is already dealing with the liquor ban as well as declining Average Room Rates (ARRs) owing to Online Travel Agents (OTAs) and hotel aggregators. While this could be a better prospect for budget hotels, the supply growth in the premium hotel category in India is expected to be only 5 per cent during 20172020. The current scenario looks grim and there is hardly anything to look forward to in the future, unless reforms are taken, both in terms of policies and regulations.