The latest news about the investors giving a nod on cutting down the goods and services tax (GST) rates on hotel tariffs, has been welcomed by the industry and fellow travellers.
The percentage of GST rates have been reduced from 18% to 12% for room tariffs between ₹1,000 – ₹7,500 per night;
and for room tariffs above ₹7,500, it has been dropped from 28% to 18%.
It has been predicted, that this change will increase the inflow of tourists and boost tourism sector in the country. But let’s see from a traveller’s point of view. I mean, for sure, the investors think that the reduction in GST rates is a great move and with the shares going up, we bet they have no reason to complain. However, is it really going to change the mind of Indian tourists or foreigners who are visiting the country to experience its ‘real’ side.
For those who like playing in the lap of luxury
For some, experiencing luxury is a part of the itinerary. Be it a one-day staycation or a week-long trip, the idea is to make the most of a luxury property and all the facilities provided. Why trek for 10 kms for a view, when you can pay just ten times the amount and get the same view from your room?
Therefore, I feel, that these tourists will rejoice the new cost of luxury. It’s like walking into one of your favourite stores to buy a pair of shoes. You are ready to pay ₹10,000 for it. You have saved up and prepared yourself for months to spend that amount. And then once you walk in, you see that not only is it on the discounted shelf, but it is available in your size too! It’s a win-win.
For international tourists, reduced GST rates is a welcoming change. If you look at popular destinations like Rajasthan or Kerala, luxury properties provide a more holistic experience as part of their stay. It is easy accessibility and more importantly, a trust-worthy option for accommodation. Let’s not forget the ease of bookings, transit and exploratory itineraries.
For those who travel on a budget
Does it really matter to them? The fact that there are a few, who like to spend more on the experience than the accommodation, reduced GST rates might not be of much help there. If anything, it might act as a nudge to look at some budget hotel options. The move has been welcomed by groups like AccorHotels who have properties like ibis and Novotel under their umbrella. So I am guessing, now these properties might actually come under the budget.
And who doesn’t mind getting steal for bed and breakfast options? Add to that, happy hours at the hotel bar (wishful thinking): BEST BUDGET TRIP EVER!
In fact, I feel that this move will also make luxury more accessible than aspirational. Some of the hotel groups provide really amazing deals which include various facilities, meals, and more. If all that is being considered and a good cost-effective package is being provided to the travellers, why would they not look at these stay options. Some of the hotel giants have mentioned, that they have already seen an increase in bookings and queries within days of the new GST rates being announced.
Once the peak season arrives, that’s when we will know for sure, how many people are actually ‘upgrading’ themselves, and if hotels are equipped to handle a large number of bookings that might just come their way.
As far as I am concerned, I think my tryst with luxury is done for the year. I stayed at a hotel property and ended up paying the original GST rates, because I checked out a day before the new rates were announced! Bad luck? Nah! I think I still managed a pretty good deal, and it was worth it (will say whatever pacifies my pockets and self). So maybe next year? Why be the experiment when you can benefit from it, by not even being a part of it. All you have to do is wait and watch.