The government has been supportive, but it should be more proactive in offering interest-free loans, more grants, tax cuts, technological advances and a measure to increase domestic travel.
By Pranav Dangi
The onset of the pandemic and the series of lockdowns that followed had a negative impact on the whole world, and the hospitality industry was at the forefront of the disruption. In fiscal year 2021, the hospitality industry lost nearly $1.3 trillion in revenue, necessitating necessary industry policies to reduce debt, losses, and other repercussions. As the 2022 Union Budget approaches, all eyes are on the Finance Minister to help the hospitality sector move forward and improve. Given the disruptions, this year’s budget will be very crucial for the hospitality industry, which can benefit from the right initiatives and regulations. So let’s see what the industry expects from the 2022 budget.
According to statistics, millennials between the ages of 18 and 38 are the most prone to travel. They often seek comfortable, safe and space-saving accommodations that allow them to work and explore the area while on the road. Therefore, reducing the GST will help reduce the cost of rooms, increase demand and encourage travelers, which will lead to a faster recovery of the industry.
There is always a need for finance to run a business, and financial institutions have played a huge role in building every industry. As a result, for a vital industry like hospitality, lower interest rates on loans will help reduce debt and quickly recover losses. Thus, it will help the hospitality industry to resume its upward trajectory.
Grants to revive the activity
Following the viral outbreak, Thailand announced a $722 million grant to boost domestic travel. However, in India, hotel groups bear the cost of salaries, assets, etc., even after incurring significant losses. Thus, the Indian government must also focus on introducing such subsidies. A waiver of fees for new license and renewal applications, at least for one year, and a waiver of property tax will help businesses recover gradually.
Measures to boost domestic tourism
Costa Rica has temporarily moved national holidays to Mondays to boost tourism by extending weekends. As a result, the hospitality industry expects the Indian government to come up with measures to promote domestic tourism. There is a growing need for the government to understand the situation and take appropriate action, as other countries have taken.
Support in technological developments
Technology can help organizations streamline processes, reduce expenses, reduce employee workload, increase revenue generation potential, and improve the level of customer service provided. In Jamaica, for example, an online platform has been launched that allows buyers in the hospitality industry to buy goods directly from local farmers. Therefore, our government should focus on helping businesses through technological advancements to ensure they continue to thrive.
The government has been supportive, but it should be more proactive in offering interest-free loans, more grants, tax cuts, technological advances and a measure to increase domestic travel. These timely changes will accelerate the recovery of losses and help the industry recover faster. So these are the main issues the hospitality industry hopes the government will address in the 2022 budget.
(The author is the founder of Hosteller. The opinions expressed are personal and do not reflect the official position or policy of Financial Express Online.)
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