By Pranav Dangi
The pandemic’s onset and subsequent series of lockdowns adversely impacted the entire world, and the hospitality industry was at the forefront of disruption. In FY 2021, the hotel industry has lost almost 1.3 trillion revenue, necessitating sector-specific policies required to curb the debts, losses, and other repercussions. With the Union Budget 2022 approaching, all eyes are on the Finance Minister to assist the hospitality sector in moving forward and improving. Given the disruptions, this year’s budget will be highly crucial for the hotel industry, which can benefit from the right initiatives and regulations. So, let’s take a look at what the industry expects from the budget 2022.
Reduction in GST
According to statistics, millennials from age 18 to 38 are the most inclined to travel. They frequently seek out comfortable, safe, and pocket-friendly accommodations that allow them to work and explore the area while on the road. As a result, reducing the GST will help lower room costs, increase demand, and encourage travelers, resulting in a faster recovery of the industry.
There is always a need for finances to run a firm, and financial institutions have had a considerable role in building up every industry. As a result, for a vital industry like hospitality, reduced loan interest rates will aid in debt reduction and speedy recovery from losses. Thus, it will help the hospitality industry to resume its upward trajectory.
Subsidies to revive the business
Following the viral outbreak, Thailand announced a $722 million subsidy to spur domestic travel. However, in India, hotel groups are incurring the cost of salaries, assets, etc., even after experiencing substantial losses. Thus, the Indian government, too, needs to focus on introducing such subsidies. A waiver on new license applications fees and renewals, at least for a year, and a waiver on property tax will aid businesses in gradually reviving.
Measures to boost domestic tourism
Costa Rica has temporarily shifted national holidays to Mondays to boost tourism by extending the weekends. As a result, the hospitality industry expects the Indian government to develop measures to promote domestic tourism. There is a growing need for the government to comprehend the situation and take appropriate action, similar to what other countries have taken.
Support in technological developments
Technology can assist organizations in streamlining processes, lowering expenses, reducing employee workload, increasing income production potential, and improving the level of customer service provided. In Jamaica, for instance, an online platform was launched that allows buyers in the hotel industry to purchase goods from local farmers directly. As a result, our government should concentrate on assisting the business with technological advancements to ensure that it continues to thrive.
The government has been supportive, but it should be more proactive in providing interest-free loans, more subsidies, tax cuts, technology advancements, and a measure to increase domestic travel. These timely modifications will accelerate the recovery of losses and assist the industry in recovering more quickly. So these are the main issues that the hospitality industry is hoping the government to address in the budget 2022.
(The author is Founder of Hosteller. Views expressed are personal and do not reflect the official position or policy of the Financial Express Online.)