Budget 2023: Tourism and hospitality looks for infra status, and more

India’s travel and hospitality sector, one of the worst affected by Covid-19 restrictions, is still looking for that helping hand which will help it clamber out of the morass it slipped into following the pandemic. Will the Union budget on February 1 have the antidote to its misery?


The sector, ranging from travel agents to hotels and restaurants to airlines and transport services, bore the brunt of the lockdowns and the lingering fear over multiple waves of Covid. Despite job losses running into hundreds of crores and several small businesses going under, the multiple tranches of relief measures by the government left the sector almost entirely out in the cold — except for a lifeline of easy loans through the emergency credit line guarantee scheme (ECLGS).


“The Indian travel and tourism industry has shown great resilience and bounced back from the brunt faced during the times of the pandemic. At this crucial juncture, the industry needs support from the government to ensure that it continues to be one of the foremost employers in the country,” said Rajesh Magow, co-founder and group CEO of MakeMyTrip.


One of the long-standing demands of the industry is to be treated as an infrastructure industry sector, something stakeholders believe should be done at least now, considering that the government has not done much to help it out during the tough times of the pandemic.


“Infrastructure status for the hospitality sector has been a long-standing demand and continues to remain so. Given the pain that the hospitality industry has gone through over the last several months owing to Covid, there is no better time for this fulfillment,” said Tejus Hose, general manager at the Hilton Bangalore Embassy Golflinks hotel in Bengaluru.


Magow of MakeMyTrip explained, “Granting this much-awaited request will help in easier access to institutional credit; will increase India’s tourism sector competitiveness in the international arena and create a long-term path for the sustainable growth of the sector.”

“We are particularly looking for proposals that talk specifically about the Indian travel and tourism industry’s short-term and long-term revival,” said Prahlad Krishnamurti, chief business officer, Cleartrip.


Tax rationalisation is another sore point which the sector hopes will find some resonance with the finance minister. This ranges from differences in tax between India-based travel companies and startups, as well as higher rate of GST for bookings through an online platform. Hotels, specifically, have been asking for a rationalisation of GST on room bookings.


Another demand is for the foreign exchange coming in through foreign tourists to be treated as export revenue.


With the dark days of the pandemic seemingly behind it and domestic travel picking up, the travel and hospitality sector feels the coming one to two years will be critical in which way Indian tourism goes — with international tourist arrivals having just started. The right measures in this year’s union budget, then, would make all the difference.


In that context, this 'ask' from the umbrella body of tourism and hospitality in the country doesn’t sound too tall. "A national tourism committee empowered like the GST headed by the PM and including all CMs should be set up (with powers to come up) with all incentives and concrete time-bound action plans for tourism,” said Ashish Gupta, consulting CEO, Federation of Associations of Indian Tourism & Hospitality (FAITH).


“If you take purely tourism (exclude NRIs visiting) India has less than 1 per cent of the world tourism market. India has the potential of attracting more than 5 per cent of the global market — geography, culture, arts etc. They need to be defined further to give us that global advantage,” he added.