TravelBiz Monitor


Saturday, 04 March, 2017, 12 : 13 PM [IST]

Peter Kerkar,
Director, Cox & Kings Ltd.

Infrastructure is a part of the 10 most important themes in Union Budget 2017 with allocation for infrastructure stands at a record INR 3,96,135 crore. Road and rail infrastructure are crucial in terms of boosting tourism as these are widely used mode of transport in India. In this context, stepping up the allocation for national highways to INR 64,000 crore, announcement to launch dedicated trains for pilgrimage/ tourism and service charge withdrawal on booking of rail tickets are welcoming moves which will help to accelerate domestic and inbound travel. Provisions made for clean and safe rail travel and making 500 rail stations disabled-friendly are also encouraging.

We are quite positive about the focus on rural infrastructure development as we see a scope to promote rural tourism even further, especially for inbound tourists. However, we need to know more about what all will be covered in five special tourism zones to be set up in partnership with states.

Vishal Suri,
Managing Director,
SOTC Travel

The Union Budget for 2017-18 would help to boost the rural, infrastructure and industrial sectors. The Budget focuses on a long term growth in 10 strategic areas. The measures announced for agriculture, housing sector, infrastructure, financial services are expected to create demand in mid to long term in the economy. Thrust in the area of youth education, online courses

etc. are expected to increase the quality. Government’s focus on JAM (Jan Dhan, Aadhar and Mobile) is a welcome move. Series of initiatives on digital payment is expected to bring efficiency in the collection and is positive for the formal sector. Income Tax benefits announced for income up to INR 5 Lakh annually is a positive move.

Tourism is an important part of the global economy and a significant employment generator. Five special tourism zones will be set up in partnership with the states. The Incredible India’s second campaign will be launched across the world. The Government’s initiative on digitisation and governance is expected to improve transparency and ease of doing business; is positive for the formal sector. The ban on cash transaction over INR 3 Lakhs is a welcome move and it is expected to provide a level playing field. Focus on railway security and upgradation of services is expected to give boost to rail tourism. Measures to control defaulters as announced in the budget, was the need of the hour. Development of tier 2 airports through PPP mode will give boost to the travel from these areas.

Mahesh Iyer,
COO, Thomas Cook (India)

This budget has very little to offer to the tourism industry, but with plans to launch Incredible India 2.0 as the next phase of growth for domestic tourism with respect to India, there is something to look forward to. In the Railway Budget, one of the biggest announcements is the withdrawal of service charge on rail tickets booked through IRCTC. Another significant development is the emphasis on safety and sanitation, by introducing bio-toilets, which will increase passenger comfort. With emphasis on a Digital Economy, by introducing measures like elimination of service charge while booking rail tickets on IRCTC, launching DigiGaons to facilitate employment & skilling, and even augmenting transactions done via the BHIM app; the Finance Minister has laid out a path that directs the country towards digital transformation. We are confident that the steps charted in the Budget will act as catalysts for change and thus move people from the unorganised sector to organised sector. Having said that, from my point of view this budget is a subdued one.

Viren Batra,
Nirvana Excursions

This budget is good for start up sector as companies will be taxed for 2 out of 7 years. Tax rate on SME and MSME has reduced up to INR 50 crore which will make small companies more competitive as compared to Corporate companies. Reduced tax burden up to INR 5 lakhs income will have people more disposable income and on the basis of this we expect travel industry to maintain a positive growth. Inbound tourism has been given big boost with creation of special tourism zones.

Sunil Kumar R,
President, TAAI

There was not much in the Budget for the travel and tourism industry. We were expecting some good news on the Service Tax issue but no exemption has been considered by the central government for our much-talked about sector. The inbound travel sector too, has been overlooked, which contributes heavily to the foreign exchange earnings. I don’t feel we have had any concrete takeaways from this budget.

Praveen Chugh,
President, TAFI

The aviation sector and the tourism industry in general has not received any benefits in the recently announced union budget 2017-18. There is nothing great about the budget. For our industry, it is neither positive nor negative. Going forward, the industry is being represented under one voice of FAITH and we are pushing hard for a better GST regime for our sector.

Biji Eapen,
President, IAAI

The new Budget has “very little” to offer to the Travel & Tourism Sector which is still expectantly waiting for the Government’s recognition as an “INDUSTRY”. It is this handicap, together with the lack of unity that exists among the stakeholders and the resulting loss of a collective bargaining capacity, that is proving costly to this all-important Sector. The announcement to have five special tourism zones set up in partnership with the States along with the launch of the Incredible India -2’s worldwide campaign as the next phase will certainly help improve In-bound tourism.

Emphasis on improving the infrastructure – laying 3500 kms of railway tracks across India, dedicated trains for religious tourism, priority on safety by the creation of a Fund, improvement of sanitation by introduction of bio-toilets – will increase convenience and comforts that will definitely encourage more people to travel more. Withdrawal of service charge on online rail ticket reservation will also encourage domestic tourism. However, everything depends on the projects implementation process and the timeline involved.

Awarding of operations and management of airports in tier II cities on PPP mode will help create a new roadmap. Though service tax been exempted, the Viability Gap Funding under Regional Connectivity Scheme will continue to be a burden on the traveling public. But it will increase regional connectivity and India will become more accessible to global travelers

Considering the tourism segments, it is quite disappointing that the recently announced increased tax slab has not been revised or any incentive package declared. The Sector is still waiting for the ‘Industry’ tag and has yet to see the GST impact. Anyhow, India is still an expensive destination purely based on our taxation policies.

Iqbal Mulla,
Chief Council, Global Tourism Council Trust

The Budget has nothing new to offer for the industry. The focus on Tier-II & III industry has been music to the ears since a long timel. There is need for time-bound implementation of the Budget initiatives on the ground level for a bright future of the industry. Once the changes are visible, the industry will start picking up pace again, which has been marred by many unfriendly initiatives.

PP Khanna,
President, ADTOI

The present budget hasn’t much focused on the tourism and hospitality sector. Though indirect benefits such as infrastructure development, skilling of youth and enhancing of education system is sure to have a positive effect in the long term. With such initiatives, people will experience better facilities and better education will also give them an improved civic sense. The Finance Minister announced setting up of 100 foreign language institutes pan India and has allocated funds for women safety.

The government is spirited to turnaround basic facilities and other related sectors will also fall in shape in due course of time. Overall, by 2020, I believe that the travel and tourism industry will be in a much better shape.

Pronab Sarkar,
President, IATO

We had good expectations from this year’s budget in the form of sops and incentives to open up huge investment opportunities and viable business avenues. We expected that government will take steps in tackling inflation. Also, service tax on tourism sector will be brought down to make India holiday’s packages competitive. As part of tourism and hospitality industry, we found it a very “Dry Affair” as budget has nothing special to offer to the tourism industry.

Even some of the benefits which we had have been withdrawn, like earlier we had 70% abatement which is reduced to 40% and earlier it was 30% taxable value and now it is 60%. This means that earlier it was taxed 4.5% on package and now it is double. We expected Service tax exemption against foreign exchange earnings which would have given real boost to tourism.

Only good thing is that the Union Budget made a brief reference of tourism as a source of employment in the country and announced setting up of Five Tourism Special Zones and Incredible India Brand will be taken to second stage of global Campaign for boosting tourism. The union budget with increased allocation for Railways with different delivery schemes specially with tourism and pilgrimage welcome addition for tourism. Similarly higher allocation for Civil Aviation, Roadways, shipping and other infrastructural development s will also serve the cause of tourism.

Ratna Chadha,
Chief Executive, TIRUN,
India Representative of Royal Caribbean Cruises Ltd.

We hope that the union budget will have a positive impact on the tourism industry which is a big employment generator, resulting in a significant multiplier effect on the economy. We are happy to see infrastructure development at airports in Tier-II

and III cities, as most of the aspirational India resides here. As Indian representative for Royal Caribbean Cruises Ltd., we want to cater to Indians who aspire to explore the world differently.

Guldeep Singh Sahni,
President, OTOAI

OTOAI is very disappointed with the budget for 2017-18. The increasing heavy tax burden is a major deterrent in the growth of tourism sector, especially for outbound tour operators, who are witnessing a drastic downturn in business with the recent tax ruling and the upcoming GST. This is further challenging the travellers, jobs and revenue generation for the country.

There is nothing in the budget to boost outbound travel. Even the domestic travel sector hasn’t received much of a philip. The government keeps highlighting the importance of tourism but it’s all in vain.

Captain Swadesh Kumar,
President, ATOAI

There is nothing in the budget for adventure tour operators. The tax on tour packages has risen to 9% which is like killing the goose that lays golden eggs. Adventure is a niche but potential segment of travel and we have been discussing our issues with the ministries at various platforms. I believe that FAITH which is the umbrella association will take our concerns forward and will push for the lowest tax slab for the travel and tourism industry.

Rajan Sehgal,
President, IGTA

There is nothing great in the budget for the tourism sector. We had big expectations as FAITH had met the Finance Minister and had given a list of recommendations.

Tourism sector is going through a bad phase all because of heavy tax burden. Outbound travel is becoming costlier. The India Tourism overseas regional offices are going through shortage of staff. Even the most visited monuments in India like Taj Mahal awaits cleanliness. We first need to get the sector in shape else this tax crisis is going to kill us.

Rajeev Kohli,
Sr Vice President, IATO

One more year, one more budget, and yet again little to boost the tourism sector. Despite being over 7% of the Indian GDP with over 37 million+ jobs, the support needed to boost this declining industry was missing, At least, our consecutive governments are consistent in not giving a damn of what the sector has been asking for.

JB Singh,
President and CEO,
InterGlobe Hotels

This budget has taken several measures to boost the travel and tourism industry. We see a strong focus on strengthening rail-road infrastructure and building of airports in Tier-II cities in order to support the tourism ecosystem, which is likely to improve connectivity across the country. Rural India holds immense potential from a tourism point-of- view, and the newly announced initiatives to further develop our rural markets with 100% village electrification will further add to the overall development of our economy. The industry was however, keenly looking forward to a stronger government focus on incentives for the commercial real estate sector such as listing of REITS, changes to the Real Estate Regulatory Bill and creation of single-window clearances besides according infrastructure status to the hospitality industry. We now look forward to the implementation of GST such that all taxes are streamlined for the long-term benefit of the country.

Partha Chatterjee,
President, SKAL Club of Bombay

I have finished 40 years in the tourism industry and have been closely associated with its guardians in various capacities. Governments came and went and even though we contribute significantly to our country’s GDP and give employment to a noticeable number, in our fragmented representation, we seem to fail every time to get the budget see our point of view.

From a macroeconomic sense and seeing the cheer at the stock markets, I would otherwise commend the Finance Ministry and the Government of a very balanced approach to this year’s budget.

Needless to say, with a fifth of the country going into elections, populism was curbed and this balanced approach taken should positively impact all our lives.

GST and service tax will play a critical role for all of us in the immediate future but I can only hope that the next generation will put their heads together to create a tourism industry supported budget.

Nishima Aggarwal,
Co-founder & Chief Performance Officer,

With the abolition of Foreign Investment Promotion Board (FIPB), we are hoping for an increase in foreign investors, bringing in more of forex in the economy, which we see going positively in our stride. So all in all it is a good budget and a good financial 2017-18.

Shikhar Aggarwal,
Joint Managing Director,
BLS International

“The Union Budget 2017 brings multifarious opportunities for the tourism sector. Establishment of five special tourism zones in partnership with the states will attract more foreign travellers and grow the inbound travel. Announcement of the second campaign of Incredible India across the globe and development of airports in tier-II cities is another great move in making India as an ideal tourist destination. Further emphasis on Infrastructure with the allotment of Rs. 3, 96,135 crore in FY17-18 by Finance Minister Arun Jaitley will provide the required stimulus to Incredible India campaign.

Also, the government’s demonetisation drive has given a tremendous fillip to digitalisation in India. The Centre’s steady focus on speedily implementing digitalisation will support the long-term economic growth of the nation. Focus on ‘digital economy’ as a part of ‘transform, energize and clean India’ (TEC-India) will be a significant factor for the development of Visa Outsourcing industry. It will help to maximize reach and increase the demand for inbound as well as outbound travel.”

Sharat Dhall,
COO (B2C), Yatra. com.

“This year’s budget is a progressive one and lays out a wider government policy towards achieving greater macroeconomic stability and better fiscal management. The sharp focus on building improved connectivity, particularly investment in road, railways & airport infrastructure across the length and breadth of the country, is a welcome move for the travel & tourism sector. This will put a much larger number of destinations on the tourist map by reducing the travel time to these smaller cities and towns. The reduction in personal taxes should also result in more disposable income in the hands of Indians, which should boost the tourism sector as well.

The announcement of creating 5 special tourism zones, in partnership with states, will lead to creation of new tourist hubs and catalyse both domestic and inbound tourism. The newer policies to promote the digital economy are also significant steps in the development of a truly cashless India, where citizens will have easy access to a wide choice of options at their convenience. “

Harsh Jagnani,
Sector Head and VP Corporate Ratings,

The Budget has laid emphasis on developing the airport infrastructure in the country which is lagging the robust growth in air traffic. The Budget proposes to invite private players for operation and maintenance (O&M) of airports at tier-2 cities which is a continuation of the recent invitation of bids for O&M contracts for Jaipur and Ahmedabad airports. Involvement of private sector in airports is likely to bring efficiency gains, making such airports more profitable. AAI too is likely to participate in the airport development, supported by funds raised by monetizing its land bank. All these initiatives are welcome addition to the recently implemented Regional Connectivity Scheme.

The budget proposes to take up select airports in tier 2 cities for operation and maintenance in the public private partnership (PPP) mode, which is a welcome step. Further the budget talks about proposed amendments in the Airport Authority of India Act to enable monetisation of land assets to raise funds for airport up-gradation.

The Airports Authority of India (AAI), which is a nodal authority for owing and managing airports, has been undertaking airport infrastructure up-gradation for last few years. While private sector has been involved in airport infrastructure development under the PPP model, however, their interest has been restricted to major airports. This is on account of low revenue generation potential of other airports. The budget proposals look to encourage both the private players and AAI for airport development. It is noteworthy that the passenger traffic is poised to cross 250 mn passengers in FY2017, which makes continued investment in airport infrastructure a key imperative.

Manoj Saraf,
Managing Director,
Gainwell Travel & Leisure

Unfortunately there was nothing in the Union Budget 2017-18 for the tourism industry. The service tax on hotel reservations and holiday packages both for inbound and outbound was increased to 9% wef. January 22, 2017. This announcement came as a shock to the industry just a few days before the budget.

At this point of time I’m yet to assess the impact of the 9% service tax on outbound tourism, which will certainly be adversely hit. The net savvy consumer will straight away have a 9% benefit, if he books overseas hotels and packages directly with an international supplier. Would he be willing to pay 9% more for the same services purchased in India through a travel agent?

Joseph Fernandes,
General Manager India,

The decision of the government to allow private companies to manage and operate airports in smaller towns and cities under public-private partnerships and also offer airport land for development of hotels and convention center is a step in the right direction. This will result in providing a strong impetus for the travel and tourism sector especially in the non-metro cities. Not only will it open up the country and new destinations for international tourists but will also offer these tier 2 and 3 the much need connectivity to ensure economic development, higher disposable income and the opportunity to travel. The government has also recognized tourism as an employment generator and will set up five tourism zones the details of which will be interesting to understand.

Sujit Nair,
Founder & Group MD,
Akquasun Holidays Pvt. Ltd

The Union Budget this year has been a complete let down as far as outbound tourism is concerned. The demonetization exercise has adversely affected business in the last quarter of the year, and the increase in service tax to 9% has dealt a body blow to the outbound business. It is high time the government realides the value of outbound tourism, which not only helps in generating foreign exchange, results in increase air traffic, along with creating a strong image of the country as a potential outbound source market.