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Business Standard
3 days ago
- Business
- Business Standard
Indian Hotels CEO highlights high taxes hurting tourism sector growth
India holds immense potential to attract foreign tourists, but it is lagging severely, Indian Hotels Company Limited MD and CEO Puneet Chhatwal said on Friday, asserting that high tax rates were a key impediment in creating global brands for the country's hospitality sector. He also sought an "additional push" while referring to the "infrastructure" status accorded to 50 tourist destinations in this year's Budget and reiterated the long-standing demand for an "industry" status. Alluding to the lack of competitive advantage in terms of margins, the Indian Hotels Company Limited (IHCL) MD and CEO said, "If you are the highest taxed sector in every possible way, GST, excise, paying all charges during COVID when your business is shut with the least amount of budget for promotion, for marketing the destination and just relying on what we have, then how are you going to create those kind of global brands on your own". Speaking at CII's Annual Business Summit, Chhatwal said India is not just a market of scale but a market of aspiration. It is where the next 500 million middle-income travellers will emerge and their disposable income, coupled with global travel ambitions, will position India very differently within the country and across the globe. In an apparent reference to Finance Minister Nirmala Sitharaman's budget speech, he said, "We at least got infra status for those 50 destinations which we have been fighting for, including industry status, which is a state subject. Collectively, all the associations have worked well to get to where we are, but now where we are, we need that additional push". In her Budget speech on February 1, Sitharaman stated that the top 50 tourist destination sites in the country will be developed in partnership with states through a challenge mode. Land for building key infrastructure will have to be provided by states. (Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
Time of India
3 days ago
- Business
- Time of India
Indian Hotels MD flags high taxes for hospitality sector
Live Events (You can now subscribe to our (You can now subscribe to our Economic Times WhatsApp channel India holds immense potential to attract foreign tourists , but it is lagging severely, Indian Hotels Company Limited MD and CEO Puneet Chhatwal said on Friday, asserting that high tax rates were a key impediment in creating global brands for the country's hospitality sector He also sought an "additional push" while referring to the "infrastructure" status accorded to 50 tourist destinations in this year's Budget and reiterated the long-standing demand for an "industry" to the lack of competitive advantage in terms of margins, the Indian Hotels Company Limited (IHCL) MD and CEO said, "If you are the highest taxed sector in every possible way, GST, excise, paying all charges during COVID when your business is shut with the least amount of budget for promotion, for marketing the destination and just relying on what we have, then how are you going to create those kind of global brands on your own".Speaking at CII's Annual Business Summit, Chhatwal said India is not just a market of scale but a market of aspiration. It is where the next 500 million middle-income travellers will emerge and their disposable income, coupled with global travel ambitions, will position India very differently within the country and across the an apparent reference to Finance Minister Nirmala Sitharaman 's budget speech, he said, "We at least got infra status for those 50 destinations which we have been fighting for, including industry status, which is a state subject. Collectively, all the associations have worked well to get to where we are, but now where we are, we need that additional push".In her Budget speech on February 1, Sitharaman stated that the top 50 tourist destination sites in the country will be developed in partnership with states through a challenge mode. Land for building key infrastructure will have to be provided by states.
Mint
3 days ago
- Business
- Mint
Indian Hotels MD flags high taxes for hospitality sector
PTI Published 30 May 2025, 03:40 PM IST New Delhi, May 30 (PTI) India holds immense potential to attract foreign tourists, but it is lagging severely, Indian Hotels Company Limited MD and CEO Puneet Chhatwal said on Friday, asserting that high tax rates were a key impediment in creating global brands for the country's hospitality sector. He also sought an "additional push" while referring to the "infrastructure" status accorded to 50 tourist destinations in this year's Budget and reiterated the long-standing demand for an "industry" status. Alluding to the lack of competitive advantage in terms of margins, the Indian Hotels Company Limited (IHCL) MD and CEO said, "If you are the highest taxed sector in every possible way, GST, excise, paying all charges during COVID when your business is shut with the least amount of budget for promotion, for marketing the destination and just relying on what we have, then how are you going to create those kind of global brands on your own". Speaking at CII's Annual Business Summit, Chhatwal said India is not just a market of scale but a market of aspiration. It is where the next 500 million middle-income travellers will emerge and their disposable income, coupled with global travel ambitions, will position India very differently within the country and across the globe. In an apparent reference to Finance Minister Nirmala Sitharaman's budget speech, he said, "We at least got infra status for those 50 destinations which we have been fighting for, including industry status, which is a state subject. Collectively, all the associations have worked well to get to where we are, but now where we are, we need that additional push". In her Budget speech on February 1, Sitharaman stated that the top 50 tourist destination sites in the country will be developed in partnership with states through a challenge mode. Land for building key infrastructure will have to be provided by states.
The Print
21-05-2025
- Business
- The Print
IHCL inks pact with Tripura govt to refurbish Taj Pushpabanta Palace in Agartala
He said, IHCL reinforces its commitment to build new tourist circuits and itineraries in line with the Tata ethos of development of a region. 'The heritage Taj Pushpabanta Palace will be refurbished to its former glory in keeping with Taj's iconic legacy. We are delighted to partner with the Tripura government for Taj Pushpabanta Palace,' IHCL Managing Director and CEO Puneet Chhatwal said in a statement. Mumbai, May 21 (PTI) Indian Hotels Company (IHCL) on Wednesday said it has signed an agreement with the Tripura government to refurbish Taj Pushpabanta Palace in Agartala as a 100-key heritage property. IHCL, under its strategic roadmap Accelerate 2030, targets to grow its multi-brand presence in the northeast region to 30 hotels by 2030. IHCL, along with its partner ecosystem, is committed to investing Rs 2,500 crore in the region over the next three years, he added. IHCL has nine operating hotels in the northeast, having presence in Assam's capital Guwahati with Vivanta and Ginger, in Gangtok with Taj Guras Kutir Resort & Spa, Ginger and Tree of Life resort, a Vivanta hotel in Shillong and Tawang, Ginger in Agartala and a Vivanta in the leisure destination of Pakyong. Besides, it has five upcoming hotels in Agartala, Itanagar, Guwahati, Jorhat and Dibrugarh. PTI SM HVA This report is auto-generated from PTI news service. ThePrint holds no responsibility for its content.
Mint
21-05-2025
- Business
- Mint
Agra's Taj Mahal regained its crown, but let's not kid ourselves
New Delhi: In late March, an Indian couple in their 30s checked into a luxury hotel in Agra for a quick three-night escape, just as the international tourist season was winding down. Once a magnet for global travellers, the hotel had long been a familiar stop on the international circuit, alive with foreign accents and camera-laden guests heading to the Taj Mahal. But this time, the scene had changed. The lobby, the restaurant, even the hotel's puppet shows and pottery classes—once dominated by overseas visitors—were now filled almost entirely with Indian tourists. Domestic travellers had quietly taken over a space that, not too long ago, was firmly international. So, where have all the foreigners gone? On paper, India's inbound tourism has recovered. India saw 18.89 million international tourist arrivals at the end of 2023, just crossing the pre-pandemic level of 17.91 million recorded in 2019—foreign tourist arrivals had finally edged past pre-pandemic levels. But a closer look at the numbers shows that non-resident Indians (NRIs) made up a big chunk of the arrivals. And arrivals from Bangladesh, many for medical care, made up another big chunk before political events in that country thinned those. In 2024, 9.66 million foreign tourists (excluding NRIs) arrived, provisional data from the government shows. This number is lower than the arrivals recorded between 2017 and 2019 (see chart). Beneath the surface, the rebound in the sector, one that contributes foreign exchange without needing trade deals, shipping routes, or heavy infrastructure, has been slower than expected. Many in the industry say what's missing is momentum—and vision. With international footfalls still subdued at marquee destinations, and overseas marketing efforts virtually absent, the question isn't just how far India has come, but how much further it could have gone. India has always been known to get a large part of its inbound travel from either low-budget international travellers or serious spenders from the US and UK in their 50s and 60s. While the former have returned to some degree and a wave of NRIs is also coming for vacations here, the pure play international tourist remains absent. A look at the results of any hotel company reveal that none of them rely on international leisure travel and tourism today. The lack of international travellers isn't being felt fully by hoteliers as the gap is being filled by domestic travellers. But is that enough? Puneet Chhatwal, managing director and chief executive officer (CEO) of Indian Hotels Company Limited, which operates the Taj group, pointed to the shortfall during the company's third quarter earnings call. 'We are still at a lower end on the pre-covid. Normally, it should be at least 120% of the pre-covid level by now… in 2024–25, foreign tourist arrivals in India are still 10–15% below pre-covid levels," he said. Chhatwal added that even the current arrivals are not necessarily pure play international tourists. 'So, a lot of those arrivals are considered foreign tourist arrivals, but they're not the real foreign tourists (meaning: NRIs make up a good chunk)," Chhatwal added. Vikramjit Oberoi, managing director and CEO of EIH, which runs the Oberoi chain, raised a similar concern. 'Foreign travel in a number of leisure locations has still not reached pre-pandemic levels," he said, during the company's third quarter earnings call. Deceptive numbers The slow growth in foreign visitors is reflected in a broader trend across several Archaeological Survey of India (ASI)-ticketed monuments in India, where international arrivals remain below past highs. Most top monuments saw contrasting international versus domestic footfalls in 2023–24 (post-covid) versus 2019–20 (pre-covid), based on available data. The notable exception was the Taj Mahal, which regained its crown and drew more foreign tourists than it did in 2019, with international footfalls rising from 6,45,000 in 2019–20 to 6,81,000. Agra Fort, for instance, is yet to return to its pre-pandemic popularity among international travellers, slipping from 3,87,000 to 2,18,000 in the same period. Compared to 2022-23, however, footfalls registered an increase. The story was no different for the Qutub Minar in Delhi, which showed a similar downward trend, with international visitors dipping to 2,20,000 in 2023–24 from 2,55,000 in 2019–20. Domestic footfalls remained robust at over 20,00,000 in both years. Humayun's Tomb and Fatehpur Sikri saw equal if not slower rebounds among foreign tourists, despite consistent visibility in the Delhi-Agra travel circuit. The story goes on with the top ten monuments. The growth in inbound tourism has been largely driven by the Indian diaspora—NRI arrivals jumped over 34% compared to 2019 and made up 26% of total arrivals in 2023. On the economic front, foreign exchange earnings from tourism rose 31.5% to $28.08 billion, said the ministry of tourism's most recent data, which captured numbers from 2023. While overall international tourist arrivals (including NRIs) reached a record 18.89 million in 2023, foreign tourist arrivals, 13% below their 2019 level, tell a more sobering story. It indicates that India is yet to fully win back international leisure and business travellers. A closer look at the regional spread of foreign tourist arrivals in 2023 reveals a heavily concentrated source base. South Asia dominated, accounting for 29.02% of all foreign tourist arrivals, followed by North America at 21.82% and Western Europe at 20.40%. The rest of the world contributed far less. The numbers also underline a long-standing imbalance: Bangladesh alone contributed over 2.1 million arrivals in 2023, though in 2024, its numbers fell to 1.70 million, making it the second largest source market after the US. Meanwhile, the recent terrorist incident in Pahalgam, Kashmir, is unlikely to significantly impact India's inbound travel industry, as the region has not typically been a major destination for international tourists. According to the latest data from the ministry of tourism, Kashmir saw 18.5 million domestic tourist visits in 2022 and 20.6 million in 2023—well above the 16 million recorded in 2020. In contrast, international arrivals remained limited, rising from about 20,000 in 2022 to 50,000 in 2023. Behind the neighbourhood India still trails many global destinations, both in terms of footfalls and earnings. In Southeast Asia, most countries have been luring international travellers with free or cheap visas, ease of access and better bang-for-your-buck hotel rooms. Indian travellers continue to drive monument traffic outside the country in large numbers with a substantial amount leaving the exchequer. Growth in domestic travel, which continues to be India's tourism engine, is strong. The country recorded a staggering 2.5 billion domestic tourist visits in 2023—a 45% jump from 2022. Rajeev Kohli, who runs a high-end boutique travel agency in Gurugram focused on bringing international travellers to India, said the industry is 'not making sense". He cautioned against drawing comfort from claims that tourism is booming. 'Yes, some parts are doing well. But inbound tourism is in free fall," he said. While hotels are showing operating profits, the trend is not uniform across the country. 'Aviation is making a lot of noise, yet only one airline is profitable. Railways are struggling to meet commercial targets with their luxury trains. Transport operators are weighed down by past debt. The list goes on," said Kohli. He argued that tourism should not be measured only by the number of travellers but by examining the structural weaknesses that few are willing to acknowledge. Where are the ads? Part of the problem, according to other industry insiders, stems from decisions made during the pandemic. In 2022, the government shut down seven overseas tourism offices in major hubs such as London, Tokyo, Beijing, and Dubai, and others where India would often take part in trade delegations. The closures have had a ripple effect, said Subhash Goyal, chairperson of Delhi-based STIC Travel Group. He pointed out that the industry had recommended appointing private marketing agencies to represent India abroad if any offices were to be closed but 'unfortunately, this was not done". The Incredible India campaign was very successful from 2002 to around 2019. After the pandemic, it has not been revived. Currently, there's barely any offline marketing and very limited digital or social media outreach by the government," said Goyal. In the Union Budget announced this February, the allocation was a measly ₹3.07 crore for FY26, a drop of 91% from the year ago. This set off alarm bells across the sector. Tourism could negate tariffs Inbound tourism is one of the few sectors that can bring in large amounts of foreign exchange without facing trade barriers, experts say. Since tourist spending isn't subject to tariffs or retaliatory duties, it gives India a unique export that is decentralised and largely unaffected by global politics. 'It's one of the best defences we have against things like tariff wars," said Dipak Deva, managing director and CEO of Travel Corporation India Ltd, which brings international tourist groups to India. 'Instead of focusing only on trade deficits from manufactured goods, we can look at how our service sector can help offset that gap. Every dollar a tourist spends—on hotels, flights, guides, local crafts, or food—directly adds to our foreign exchange. There's no need for shipping containers, trade deals, or port clearances. All it needs to grow faster is serious policy support." Deva is confident that if bottlenecks are fixed, the country could see the sector contributing $50 billion by FY27-28 from the $30 million or so in 2019. This forex just involves policy vision and execution, he said. 'We have the best tourism product in the world—it's just that not enough people know about it. The government should spend at least ₹1,000 crore to market it effectively using social media," he added. Creative Travel's Kohli underlined that when business is down, marketing needs to increase, not reduce. 'There is simply no demand for India. It's a consumer business. Why do Apple and Samsung advertise so much? It's economics 101," he said, noting that travellers are going wherever there are promotions, offers and choices. It is not as if the tourism ministry is in denial of these imperatives. Addressing the recently concluded Skift India Forum in March, Mughdha Sinha, director general, tourism, Government of India, said, 'Inbound travel is important because any outlier event can make you go 'kaput'. Though marketing (of the country) is important, we have limitations. [But] Whatever…limitations we have today, we will carry the story of India and make it viral through whatever means we have." Representatives from the ministry of tourism did not respond to Mint's detailed questionnaire seeking clarifications.
