India promotes tourism into a key industry

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India is planning to cut taxes and create more incentives for tourism, hoping to boost economic growth and create more jobs, Reuters quoted sources from the government.
The Indian tourism market, with an estimated size of $ 210 billion, grew 10% during the period from March to September 2017, while the same period a year earlier was 8%.

In an interview with Reuters, a senior official of the Ministry of Finance said India will soon issue some measures to boost investment in tourism and Finance Minister Arun Jaitley has proposed reducing tax on guest services. Hotel, encourage attracting private investment.

Rising signals for businesses

This move is expected to boost tourism in the second most populous country in the world, where low inflation and rising income levels are changing the lifestyle and consumption habits of about 250 million among middle class people.

If the new policy is put into practice, it will be good news for many businesses operating in this field such as airlines, hotels, tour operators …

According to Pronab Sarkar, President of the Association of Indian Tourists (IATO), in India, average tourists pay 30% tax for hotel and transportation services, while in Singapore and Thailand and Indonesia less than 10%.

The source said, Minister Jaitley is expected to reduce corporate income tax, tax incentives for hotel construction, allocate more budgets for the purchase of new cruise ships and repair roads leading to scenic spots. scene.

The Indian government will also offer incentives to many regional airlines to promote the exploitation of new airports or operate at a low capacity.

Last week, in his speech to Congress, Indian Tourism Minister K.J. Alphons reports that the country needs an additional 200,000 hotel rooms to serve tourists.

Hotel room capacity in India is at its highest level since 2008, although many hotel chains have increased in price. Catching up with the rising demand, many foreign investors have quickly jumped into the market, for example SoftBank (Japan) has invested in OYO Rooms startup to launch a budget hotel network. More than 200 tourist destinations in India.

Alphons also said that India needed more resources to create new infrastructure and build tourism programs, especially to be aware of the potential for development of less-known localities. .

Sharing this view, Prime Minister Narendra Modi also affirmed that tourism development, especially in the far-eastern states of the Northeast, is one of his top priorities.

New growth motivation

One of the main drivers of India’s tourism boom is not to mention the birth of five regional low-cost airlines in 2017 with more than 100 routes, favored by the government to make way. Fly to remote areas, encouraging thousands of families to know for the first time how to fly.

Indian domestic airlines transported 10.6 million passengers in the first 11 months of 2017, up 17% from the same period last year, thus boosting some major airlines like Spicejet, Jet Airways and Vistara also opened new routes.

A remarkable trend now is domestic tourists, accounting for 88% of passenger traffic, preferring to book tickets and book hotels online. MakeMyTrip tourism website has listed the number of hotel reservations in the third quarter of 2017 increased by 186%.

The Indian tourism market, with an estimated size of $ 210 billion, grew 10% during the period from March to September 2017, while the same period a year earlier was 8%.

More than 9 million foreigners visited India in the first 11 months of 2017, an increase of 15.6%. The tourism industry is employing 40 million people and can create 10 million more jobs in the next 10 years.

Many argue that tourism can emerge as a new growth engine in India, along with the information technology industry, but desperately needs government support, for example, reducing taxes, easing regulations, infrastructure construction … if you want to ensure tourism growth of 15-20% / year in the coming years.