28% GST on luxury hotels a dampener

According to a recent ANAROCK research, India’s ever-growing middle-class, rapid infrastructure development, rise in foreign tourists and the provision of the e-Tourist visa facility to nearly 164 countries gave a major boost to the hospitality industry in 2018. Technology played a vital role, with 2018 seeing a significant rise in the number of online bookings via mobile devices and apps. Social media platforms also drove significant footfalls. Branded budget hotels emerged as the flavour of the year for Indian hospitality. Demand for hotel rooms continued to be driven by the meetings, incentives, conferencing and exhibitions (MICE) segment, further underscoring the benefits of India’s improved ease of doing business rankings.

Nevertheless, 2018 saw at least one major setback for the hotels industry – the 28% GST on luxury hotels gave India the dubious distinction of being one of the world’s most taxed hospitality markets.

Innovation was the key word for the hospitality sector in 2018, with most player re-inventing their strategies and designing customized products to attract tourists. The retention and acquisition of key assets made for a lot of headline reportage, but the stronger, though subtler ‘vibe’ emanating from the hospitality industry was the struggle against becoming obsolete and irrelevant.