The recent tax cuts in corporate and hotel sectors have uplifted the spirits of the tourism sector in Himachal Pradesh with the industry expecting a boost in tourist arrivals and subsequent increase in spending.
The Central government’s move was welcomed by Shimla Hotel and Restaurant Association (SHRA) and said the tax cuts were a historic and major boost to the economy that will benefit Indian consumers, especially tourism in the state.
SHRA president Sanjay Sood thanked Chief Minister Jai Ram Thakur and Minister of State for Finance and Corporate Affairs Anurag Thakur for taking up the issue of reduction of tax and protecting the interest of the tourism and hospitality industry.
“They have ensured the voice of our region and sector is heard in New Delhi at the highest level,” he added.
Sood said the historic cut in corporate tax and reduction of Goods and Services Tax on hotel rooms will be a big boost to mountain states and small companies in these regions that are largely tourism-driven.
Further, allied sectors such as restaurants, catering, taxis, home-stays, tour services, and informal tourism services will see a growth of Double Growth due to an increase in domestic tourism alone.
He lauded the vision of Prime Minister Narendra Modi for boosting domestic tourism as he had asked every Indian to visit 15 destinations.
“India ranks 7th in the world according to Tourism contribution to GDP and the country have witnessed the highest growth since 2014.
Tourism contribution to GDP is 9.6 percent and will double in the next few months as India is the fastest-growing Tourism market amongst G20 nations of the world,” he said.
He said as per data, most domestic tourists prefer ‘Budget Tourism’ and prefer rooms under Rs 1000 and this segment would witness a significant jump in spending owing GST reduction.
There was the facility of Visa on arrival for nearly 50 countries and E-Visa facility for 166 foreign nations, new airports, better highway connectivity, uniform and lower GST rates, UDAAN Seva (Rs 2500 for 1-hour flights) will boost the tourism sector.
Sood said domestic tourists in 2018 were 1.82 billion and the growth is expected to be in double-digit due to the steps taken by the Modi government.
Lower hotel room tax means more spending on related services, taxi, restaurants, and increased profits. He appreciated the efforts of Chief Minister Jai Ram Thakur for attracting investments to the state and said Thakur’s efforts should be complemented by one and all.
He called for private and government sector cooperation for the development of tourism infrastructure in Himachal and said private investments would provide job opportunities to local youth as well as supporting the economy of the state.