THE FEDERATION OF HOTEL & RESTAURANT ASSOCIATIONS OF INDIA (FHRAI)
Federation of Hotel & Restaurant Associations of India (FHRAI) in their pre-budget memorandum submitted to the Union government has demanded inclusion of hotel accommodation and air-conditioned restaurants in the negative list of Service Tax till Goods & Services Tax (GST) comes into force. Supporting the early introduction of GST, the FHRAI memorandum asked capping of composite tax burden on tourism sector under GST at eight percent. A delegation of FHRAI, led by the President, S M Shervani participated in a high-level pre-budget meeting, chaired by Rajiv Takru, Secretary (Revenue), Government of India.
Among the key demands, FHRAI has urged lowering of the threshold figure of Rs 200 cr set for eligibility under Infrastructure Lending List for hotel projects to a reasonable Rs 50 cr so that hotel projects catering to diverse market segments can leverage benefits out of it. Instead of being applicable only with prospective effect, FHRAI demands this benefit should also be available to operational and under-construction hotels and they may be allowed to switch over their existing loans to the terms applicable for infrastructure projects.
The memorandum among other things also urges the government to permit Selected Term Lending Financial Institutions to float industry specific tax free bonds, so that these institutions can mobilise funds and deploy that fund to help asset creation in the tourism industry. FHRAI also repeats the long pending demand of rationalisation of taxes so as to position India as a globally competitive destination. Rationalisation of our industry's multiple tax structure is needed, so as to position India as a globally competitive tourist destination.
Outlining FHRAI's key proposals, Shervani said, “The past two years have been a particularly challenging phase for the industry, due to the impact of continued global economic uncertainties and a sharp domestic downturn. However, despite these adverse headwinds, the long-term potential of India's tourism sector and its strategic role in supporting our country's quest for inclusive growth remains undiminished. In this scenario, FHRAI's recommendations for the forthcoming Union Budget have focused on policy measures which can allow our industry to deftly navigate the myriad near-term challenges which we confront and also build a strong foundation for the sector's rapid and sustainable future growth.”
"FHRAI welcomes the decision to extend the last date for obtaining License/ Registration by existing Food Business Operators by a period of six months. We have been vigorously engaging with the Government at the highest level, on various technical and regulatory aspects of the new Food Safety Law and had demanded an extension of this deadline as it did not take into account the ground realities and practical constraints faced by the industry.
FHRAI supports the progressive intent and basic tenets of the Food Safety & Standards Act, but we have strong reservations on certain procedural issues and implementation mechanisms envisaged in the new law and its accompanying regulations. We also firmly believe that a sweeping reform of this nature can only be viably introduced by adopting a calibrated and consultative approach. Instead of arbitrary deadlines, the current focus must now shift to building greater awareness, particularly in the unorganised sector and allowing sufficient time to both the regulator (FSSAI) and our industry, to put in place robust internal systems, transparent processes and a pragmatic compliance framework."
“On behalf of FHRAI, I applaud the historic steps announced by the Central
Government to modernise India's tourist visa regime. We are particularly grateful that the Government has accepted our proposal to adopt a system of Electronic TravelAuthorization, which will offer multiple advantages of speed, efficiency, convenience and flexibility, while minimizing security related risks. With strong support from the Ministry of Tourism, FHRAI had been assiduously pursuing this issue with the Union Ministry of Home Affairs and we had emphatically highlighted that a bold and timely
decision will be imperative to enable us to accomplish the vision of doubling our Foreign Tourist Arrivals (FTAs) to 12 million within the next five years.
A seamless and differentiated visa mechanism to encourage and facilitate foreign tourist travel is imperative to position India as an attractive and welcoming destination and enhance the global competitiveness of our tourism sector. At a time when we are witnessing the adverse impact of a global and domestic economic slowdown, these measures to simplify visa norms will give a much needed impetus towards leveraging tourism's intrinsic potential to spur job creation and boost our country's foreign exchange earnings.
We look forward to extending our full support to the Home Ministry and other Government agencies to ensure that the requisite infrastructure, in terms of technology and personnel is expeditiously put in place, so that this initiative can be operationalised well in time before the onset of peak tourist season this year.”
FHRAI PRESENTS THE INDIAN HOTEL INDUSTRY SURVEY
January 20, New Delhi: The Federation of Hotel & Restaurant Associations of India (FHRAI) has released the latest edition of its widely acclaimed annual publication, the FHRAI Indian Hotel Industry Survey, published in cooperation with HVS Hospitality Services. The survey encapsulates the performance of hotels in all major Indian cities and across star categories and market positioning. In addition to in-depth data on financial and operating metrics such as occupancy, average room rates and revenue per available room, the report also includes a comparative analysis based on parameters such as guest facilities, manpower, technology adoption, choice of marketing media etc.
A presentation on the key highlights and trends emerging from this year's survey was made by Mr. Manav Thadani, Chairman-Asia Pacific, HVS, to a select audience comprising of top hoteliers, senior government officials and the media, at an event hosted by FHRAI at The Leela Palace, New Delhi today. Mr. Parvez Dewan, Secretary, Ministry of Tourism, Government of India graced the occasion as Chief Guest.
Addressing the media, Mr. S.M. Shervani, President-FHRAI said, “As the leading national voice of the Indian hospitality industry, FHRAI accords high priority to producing credible research and contemporary thought leadership which can shape policy and guide business strategy. Our annual Indian Hotel Industry Survey is an exemplary reflection of this very commitment and it is extremely gratifying that this publication serves as an indispensable reference and benchmarking resource for hospitality professionals, policymakers, investors, mediapersons and other stakeholders.”
Sharing his assessment on the hotel industry's performance in the past year, Mr. Shervani said: “Despite sincere efforts, both by the Government and the private sector, India’s global market share in tourism remains at a disappointing 0.68%, with the country being ranked 41st in the world in international tourist arrivals. The World Economic Forum’s influential Travel & Tourism Competitiveness Index, placed India at the 65th position among 140 nations in 2013. It is pertinent to note that on their three pillars of competitiveness, India was well assessed in terms of its human, natural and cultural resource endowments with a rank of 21, but scored an abysmally low position of 110 globally in its regulatory framework for travel and tourism and 67 on business environment & infrastructure. It is thus amply evident that India has been unable to convert its inherent comparative advantages into a sustainable competitive advantage for our hospitality and tourism sector.
2013 was certainly a challenging year for the industry on account of the global and domestic slowdown, which is also visible in the pressure witnessed on hotel occupancy and average room rates. In a tough macroeconomic environment marked by high inflation, rising interest rates, currency volatility and a tepid demand scenario, hotel companies have prioritised realignment of their cost structures, optimizing operational efficiencies and adopting flexible business models. At the same time, the industry is optimistic about the long-term potential of the Indian hospitality sector and we remain steadfastly focused on pursuing customer-centric innovation, delivering service excellence and tapping newer market segments.
A heartening trend for the sector in the last few years has been the robust double-digit growth in domestic tourism. However, to sustain this momentum, it will be imperative to steadily augment our hotel room inventory in the affordable tourist accommodation segment. In order to achieve the 12th Plan target of 1452 million Domestic Tourist Visits (DTVs) by 2017, the industry needs to add 1,20,000 rooms in the budget and mid-market category, entailing an estimated capital investment of rupees 50,000 crore. The Government must facilitate this massive investment by reducing the minimum project cost stipulated for inclusion of hotels in the RBI's Infrastructure Lending List from the present rupees 200 crore to a more reasonable threshold of rupees 50 crore. FHRAI has also proposed that bank loans up to rupees 10 crore extended to SMEs in the hospitality industry should be permitted to be classified as “priority sector lending” under RBI norms.
Achieving a meaningful growth in Foreign Tourist Arrivals (FTAs), requires that the Government must empower the industry to effectively compete with our peers in neighbouring destinations such as South-East Asia, by urgently rationalising our complex multiple tax structure, adopting a streamlined electronic visa regime for international tourists and reviving investor sentiment in the hotel sector through measures such as single-window project clearances and access to lower cost long-term funding.”
The Federation of Hotel & Restaurant Associations of India (FHRAI) is the apex body of the Indian Hospitality industry and represents nearly 4000 members, including Hotels, Restaurants and associates, spanning the length and breadth of our vast country. Founded in 1955, the association has diligently built on its rich legacy and is today privileged to serve as the leading voice of our industry and plays a seminal role in supporting the growth trajectory of India's hospitality and tourism sector. FHRAI provides a vibrant interface between the industry, government, regulatory bodies, academia, international organisations, civil society and the media.