Budget 2022: This is What Travel, Tourism and Hospitality Sector Expects to Bounce Back; Watch Video
Budget 2022 Travel, Tourism and Hospitality: Industry experts Aloke Bajpai, Co-founder & Group CEO, ixigo and Aditya Chamaria, MD, Damodar Ropeways & Infra Limited decode what the industry expects from Budget 2022-2023 to bounce back.
Budget 2022-2023 Travel, Tourism and Hospitality Sector Expectations: As the pandemic becomes endemic, we are seeing the true bounce-back potential of domestic tourism which saw a sharp rise in tourist flow in 2021 due to pent-up demand, vaccine roll-out, and revenge tourism. While demand and search queries for travel have been slowly climbing in the last two quarters and the industry is regaining momentum, certain provisions by the government can help bolster the industry back to pre-COVID-19 levels sooner. Industry experts Aloke Bajpai, Co-founder & Group CEO, ixigo and Aditya Chamaria, MD, Damodar Ropeways & Infra Limited decode what the travel and tourism and hospitality industry expects from Budget 2022-2023.
“We have noticed the rise of domestic air travel from tier 2 and 3 towns and budgetary focus on the development of infrastructure, technology, and safety measures of existing and new airports in Tier 2 and 3 cities will help boost tourism by improving connectivity with those cities where trains or buses may be the only connectivity today. We are looking forward to the government strategizing a sustainable long-term plan to help revive international travel which is currently disrupted by ongoing waves. The introduction of innovative initiatives like the ‘sandbox schemes’ currently being followed by countries like Thailand and Indonesia for fully vaccinated tourists will help India build a more resilient tourism economy going forward. We also expect the upcoming budget to allot incentives for domestic tourism and promote it within the country. IT deductions on domestic travel and tourism spends will help incentivize tourism and boost domestic travel further. Tax breaks and waivers for the airline sector will also help aid faster recovery of the industry. Bringing ATF under the ambit of GST (which currently comprises 40-45 per cent of the total operating cost of an airline) will bring much-needed relief to the aviation sector, Aloke Bajpai, Co-founder & Group CEO, ixigo.”
“We expect the Government to introduce measures in this Union budget 2022-23 which will help to improve the potential of ropeways, boost tourism and enhance urban transport connectivity. GST on ropeways currently is at 18 per cent, which is higher than that on air travel at 5 per cent (economy) 12 per cent (Business class), Railways (5 per cent), Highway Tolls (0 per cent). In fact, ropeways should be treated at least at par with Railways where the GST is 5 per cent with input tax credit, because, they cater to all sections of society. Even this tax reduction will go a long way in boosting the industry and making it more viable to operate Ropeways without having to raise ticket prices to offset the increases in all other input costs. The ropeway projects are mostly situated in hilly areas, and the cross section of consumer availing the services comes from the average earning socio-economic class of people and a large % are villagers going on a pilgrimage. For ease of doing business and fast-tracking new / proposed projects, especially for tourism or Urban transport systems, support from government is needed. in streamlining the process of licensing, permits in construction of ropeway and cable car projects and even those under O&M. The Subsidies like those proposed for Varanasi project of 30 – 40 per cent is a step in the right direction, and is needed to bolster this necessary industry. We are witnessing that larger number of tenders are being floated, but government is still focused on promoting CEN standards (European) for validating a ropeway project. Indian BIS standards have been upgraded recently and are very much at par with the CEN standards. Our recommendation to the authorities is to bring some kind of hybrid model for certification. Benefits of this hybrid model will go long way, as it will significantly reduce the cost of the overall projects by atleast 15% to 39% without any compromise on the standards of safety or quality. This will ultimately translate into faster RoI, more companies participating in the tenders and ultimately the pricing of tickets born by the customers, Aditya Chamaria, MD, Damodar Ropeways & Infra Limited.”
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