High tax rates will decline inbound tourism: Hoteliers

The newly imposed 28 per cent tax on luxury hotels in India, is a burden for most of the global hoteliers, as it would affect the future development plans of the brands.

Major hotel brands have raised their concerns, at Hotel Investment Conference-South Asia (HICSA), that India is one of the immense taxed counties in the world.

“It is a singular tax so it makes it easy to do business. But, in relation to the quantum of the tax, it makes it one of the highest taxes in the world on travel. In terms of the quantum of the tax we want to make sure that the owners are achieving the yields so that the industry continues to grow,” said Alan Watts, president, Asia-Pacific Hilton.

Meanwhile, in Indonesia, during the domestic economy downfall, the country introduced strong visa policies, that increased the inbound tourist arrivals.

“If India is really serious about attracting more international visitors, who also typically have higher spending power, by shifting something like a visa policy, you can immediately open up and tap into more markets. The same is true for taxation. You can easily turn on the tap of inbound visitation or domestic travel by adjusting some of these taxes,” said Katerina Giannouka, president, Asia-Pacific, Radisson Hotel Group.

More representatives have come forward to raise their concern on lowering GST in the travel industry, as it could strengthen the travel and hospitality industry.