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Hotels look for easier policies post elections


India’s hospitality sector, which has been struggling with low room rates for the past five years, is expecting the next government to usher in friendly policies and an improved business environment.

At present, hotels are taxed anywhere between 20% and 25% depending on the state they operate in. In comparison, other Asian countries levy between 8-10%. The different tax structures in different states are also difficult for tourists to comprehend, say hoteliers. The ongoing economic slowdown too has hurt the sector as it affected both business and leisure travel.

“The general slowdown in the economy has hit the hotel industry. Over the last two years, average room rates have definitely reduced and occupancy has been stagnant,” said SM Shervani, president of the Federation of Hotels and Restaurant Associations of India (FHRAI).

In fiscal 2012-13, occupancy rates in the sector dropped to a decade low of 58.3% and the average room rates fell to the lowest in six years at Rs 6,214, according to data from hospitality consultancy HVS. Data for the last fiscal year aren’t available.¬†Hotel owners want the next government to reduce interest rates on loans for the industry. “In the last decade, interest rate for new projects has been hiked from 8.00-8.25% to 12.50%,” said Ashish Jakhanwala, managing director of SAMHI Hotel Investment.

Read the full report here, Economic Times 


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