Government Incentives for Economic Growth: Infrastructure Status for Hospitality and HAI for Industry

India's hospitality sector seeks industry status at state level and infrastructure status from the Centre to attract investments and develop new tourist destinations. The sector expects tourist arrivals to reach pre-pandemic levels by March 2025 but emphasizes the need for easier visa procedures and global promotion campaigns. Industry status would provide benefits such as lower power tariffs and interest rates, while infrastructure status would allow for more international investment. If these measures are not implemented, growth in the sector will be limited. The sector aims to capitalize on India's economic growth and increased air travel to boost its performance.

There is an urgent need for the hospitality sector to be granted industry status at state level and infrastructure by the Centre for it to attract more investments and play a part in the development of 50 new destinations announced by the government, according to newly elected president of Hotel Association of India (HAI), KB Kachru.

The sector is also hopeful that international tourist arrivals in India will reach pre-pandemic levels by March next year but ease of getting visas needs to be facilitated, while also taking up campaigns to promote the country as a destination globally.

''The government has declared 50 new destinations. Investors will be interested to invest money in these destinations if the infrastructure is there,'' Kachru, who is also Chairman -- South Asia, Radisson Hotel Group, told PTI.

He further said,''People will only invest money if the related incentives are given...Unless the industry is motivated to invest in these destinations, we will not achieve what we want.'' Kachru asserted that the hospitality sector is not ''asking for subsidies or things which are difficult for the government''.

''What we are saying is that whatever is the wish for the government, how can we contribute?...What we are saying is that treat us at state level as part of industry like any other such as manufacturing...If we are treated like that at state level, we will get all the related benefits and we can grow.'' In the absence of industry status in many states, the hospitality sector is treated as a commercial sector resulting in much higher power tariff and interest rates on borrowings.

At the central level, he said,''We have been asking for infrastructure status...what will happen as a result of it is that we will be able to attract investments, not only domestically but in a big way internationally. We can borrow money at a reasonable interest with infrastructure status which at the moment is not allowed.'' This will motivate international investments to come into India. This is a kind of direct incentive to people to assure that their investment is safe, Kachru added.

He noted that while airports are given infrastructure status, hotels are not, and if there are not enough accommodation and facilities for people to stay it would be difficult for a destination to grow.

When asked if the industry status at state level and infrastructure at the central level is not forthcoming, what could be the impact, he said,''The growth of the hospitality and tourism sector would move very organically because we are developing and positioning in a manner that we have an opportunity here.'' ''Sometimes you use the opportunity the right way. It is for us to take a big leap forward,'' he said while pointing at the possibility of missed opportunities for the sector.

Kachru, however, acknowledged ''we have been seeing a lot of change and positiveness amongst all stakeholders -- states and Centre.'' On inbound tourist arrivals, he said,''We are hoping to catch up to 2019 (levels)...Our aim is to reach the pre-pandemic level by March 2025.'' As per estimates, foreign tourist arrivals in India in 2019 was nearly 1.1 crore.

Kachru, however, said a lot of work has to be done in terms of marketing India and facilitating ease of visas to attract more foreign tourists.

There has to be a dedicated action plan internationally to promote India, promote more incoming flights and ease of getting visas, he added.

When asked about the overall growth outlook for the hospitality sector, he said,''With the economic growth of 7 per cent that we are talking about, our industry is looking for even better growth. With so many new aircraft coming in across different airlines, there would be more travel.''

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)