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Five-year tax holiday to boost hospitality, tourism sectors
March, 07th 2008

India goes beyond the Taj Mahal This move by the Govt will boost the supply of hotel rooms and encourage tour operators to promote other destinations.


Manish Basu

The Indian hospitality and tourism industry is going to get a big boost from this years Union Budget, feel players from the sector.

The Finance Ministers decision to give a 5-year tax holiday to two-, three- and four-star hotels established in districts with UNESCO world heritage sites, may attract local players to build hotels at such places. There are 27 heritage sites in India.

Mr Suresh Kumar, President of ITCs Fortune Park Hotel, said, With local investors getting an impetus to invest in hotel construction in the sites, this will open up new business opportunities for us in hitherto uncovered locations. This will also raise intra-regional travel by increasing the number of quality overnight lodging facilities.

Costly destination

Mr Nitin Sakunia, Director, Travel Bureau, said, India is a very costly destination for foreign tourists, so far as hotel charges is considered. The new incentives will increase competition, bringing down hotel rents.

There is a serious dearth of quality hotels at UNESCO-declared heritage sites such as the Sunderbans in West Bengal, Kaziranga and Manas National Parks in Assam, and the Mahabodhi temple in Bihar, he said.

Nearly 2 lakh tourists (of which 10,000 are foreign tourists) travel to the Sunderbans, 1.5 million (8 lakh foreigners) visit Bihar, and 2 lakh tourists (70,000 foreigners) visit Assam each year, he said. But lack of accommodation restricts activity in these regions.

However, with foreign exchange companies being brought under the provision of taxation in the budget, the volume of inbound tourists will be adversely affected, Mr Sakunia said.

Commonwealth games

Prof Sandeep Kulshreshta of the Indian Institute of Tour and Travel Management, Gwalior, said the Budget announcement had come just at the right time with the Commonwealth Games scheduled to be held in Delhi in 2010. Delhi falls under the Golden Triangle along with Agra and Jaipur, which is declared as a heritage site. Foreigners coming for the event will surely want to visit those places. This new incentive will help to solve the problem of a lack of accommodation, he said.

Mr Peter Kerkar, CEO, Cox and Kings, said, India goes beyond the Taj Mahal. UNESCO-declared heritage sites like Ajanta, Ellora, the Sanchi Buddhist temples, the Hampi temples in Karnataka, and the Elephanta Caves in Maharashtra have a crying need for quality accommodation.

This move by the Government will boost the supply of hotel rooms and encourage tour operators to promote these destinations more aggressively.

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