The Travel and Tourism industry had many expectations from the Union Budget 2017, but apart from announcing special tourism zones, a new Incredible India campaign and some infrastructural development, Finance Minister Arun Jaitley neither offered any respite nor a direct boost to the industry. Infrastructural development to boost regional connectivity is however expected to promote domestic tourism. By Shibani Bawa
The highlights for the tourism industry are:
- Since the excise duty on Aviation Turbine Fuel has gone up to
14% as opposed to 8%, fliers will be expected to pay more on airline tickets.
- Railways on the other hand will offer competitive ticket booking facility to the public at large. Tickets booked through IRCTC will be exempt from service tax.
- Five special tourism zones anchored on SPV (Special purpose vehicle) will be set up in partnership with the states.
- Incredible India’s second campaign will be launched across the world, which is expected to boost domestic tourism.
- Selective Airports in Tier II cities will be taken up on PPP mode (Public-Private Partnership) for upgradation.
- Head post offices will be used for passport submission centres.
- Soft drinks and mineral water will also be costlier due to the hike in excise duty on water including mineral water and aerated water containing added sugar or sweetening matter to 21% from 18% earlier.
As far as the hospitality industry is concerned, we got mixed reaction on the budget:
“We were expecting much more for the travel and tourism industry, and we are a bit disappointed that the Government did not announce any package, incentive for the sector. The good news is the emphasis on improving the infrastructure—that of 3,500 railway lines across India, setting up of airports in Tier-II cities and dedicated trains for religious tourism—will ultimately work in encouraging people to travel more. But it all depends on the implementation and the time for the projects to materialize. The announcement of ‘no service charge’ on IRCTC bookings, done clearly to encourage digitization is a move that will benefit a company like us. This move will create a healthy approach of travelers towards travel planning online, spells good news as 80 per cent of our transactions happen online.”
—Dhaval Jani, Vice President, Sales & Marketing, V Resorts
“We believe that the Union Budget for 2017 is a step in the right direction for the hospitality industry across the country. The cash transaction limit till Rs 3 lakhs will normalise the cash flow after the effect of demonetisation. No change in the GST across platforms will benefit the hospitality sector. Direct tax rates reduced will give the entry level customers a fair share of disposable income. These developments will benefit the premium hospitality chains immensely for the coming year.”
—Gaurav Singh, General Manager, Courtyard by Marriott and Fairfield by Marriott