The uptick in domestic and leisure travel had come as good news for the travel and hospitality industry last year. As the caseload came down from mid-2020 onwards, many tour companies began their slow march towards business recovery. They were especially elated after seeing flight and hotel bookings pick up during the festive season and then spill over to the long New Year’s Eve weekend.
However, COVID-19 once more slammed the brakes on their road toward business revival. The sudden surge in infections due to the new Omicron variant and subsequent restrictions and closures have seen these bookings steadily decline.
The sector is now pinning its hopes on the upcoming Union Budget 2022. “We look forward to the upcoming Union Budget’s consideration of further economic relief for the industry at-large with lower taxes and incentives to help boost the road to recovery,” said Vishal Suri, Managing Director of SOTC Travel.
While he stated that the industry appreciates the Government’s support to enable revival and strengthen the sector, he anticipates a complete rationalisation of GST, reduction or elimination of the TCS on outbound travel, and scrapping the INR 5 crore capping for the SEIS benefit. “Rationalisation of tax structure will help reduce complexities and will enable the industry to focus and accelerate businesses further. Eliminating the INR 5 crore capping for the SEIS benefit would provide much needed impetus to post COVID-revival of the tourism industry and promote employment generation,” Suri explained.
While there is pent-up appetite for domestic travel, most of this has now narrowed to urgent personal or business requirements in light of the prevalent environment where there are several restrictions. Hence, to boost domestic travel and tourism, incentives should be offered to corporates for organising MICE events and conferences in India. This could be done through partial or full tax exemptions to the corporates on the expenses incurred.
“We seek assistance from the government in enhancing the structural transformation that is needed to build a stronger, more sustainable and resilient tourism industry,” Suri noted.
This is the time for the administration to focus on the tourism sector as a sustainable engine for economic growth and development. It is also time to reboot the tourism economy on a stronger, fairer and more sustainable footing.
