CII’s Annual Tourism Summit puts forth their Tourism Policy Dashboard 3.0 which details critical areas that needs attention.
The unprecedented COVID-19 induced crisis has led to a shutdown of the travel and tourism industry; and has placed significant pressures on the entire economy. CII estimates suggest that the entire value chain linked to travel and tourism is likely to lose around 5 lakh crore or US$65.57 billion, with job losses reaching 2 crores in the sector. The coronavirus puts a furrow on the Indian tourism industry, as domestic and international travel plans are shrouded with a veil of uncertainty. In this growing time of uncertainty, it is imperative that a new-normal for the tourism industry is establishment. A model needs to be fabricated that inculcates multiple dimensions of the proposed new-normal, with the revival of the sector at the forefront along with the efforts of industry and government.
The CII Annual Tourism Summit, held recently, provided the necessary platform for all the stakeholders of the industry to converge, and help create a blueprint for the post COVID-19 world. There have been curated sessions that plan to refurbish certain locations while creating a best practices model that can be followed to help India stimulate its domestic tourism, while envisioning a future that will help drastically increase our international tourist footfall and put India back on the map.
Addressing the inaugural session of the CII Annual Tourism Summit, Dr. Pramod Sawant, Chief Minister of Goa highlighted that the State has launched a new Tourism Policy which will help the government push the systematic development of the sector. “This Policy has been framed to offer the unique Goan experience to visitors by presenting a mix of holistic, natural and cultural locations and attractions. This Policy will be the backbone for crucial decision of planning, development and marketing. Goa is also working on creating a robust system where small hospitality players can be brought under a single portal to help boost ease of doing business.”
Puneet Chhatwal, Chairman, CII National Committee on Tourism and Hospitality and MD & CEO IHCL, expressed that five broad areas need to be addressed to build a stronger more sustainable and resilient tourism economy; “Reopening the tourism economy, restoring traveler confidence, relooking at infrastructure and hygiene, rebuilding destinations and rethinking the travel and tourism sector in the long run.”
Deep Kalra, co-Chairman, CII National Committee on Tourism and Hospitality and Founder & Executive Chairman, MakeMyTrip stated that reopening of the tourism economy will not happen without assuring traveller confidence. “While there exists demand today, more has to be done to improve confidence. One of the biggest silver linings seen is how closely the industry has come together and how well public and private partnership has responded to this crisis.”
“This Policy has been framed to offer the unique Goan experience to visitors by presenting a mix of holistic, natural and cultural locations and attractions. This Policy will be the backbone for crucial decision of planning, development and marketing” DR.PRAMOD SAWANT, Chief Minister, Goa
The CII Annual Tourism Summit was witnessed by more than 800 delegates and the release of the CII Tourism Policy Dashboard 3.0 which details the critical areas that needs attention to help build a cohesive and robust industry.
(Excerpts from the Summit)
The need for Tourism to be brought under the Concurrent List
In order for these sector specific measures to reap the benefits that are desired, it is imperative that the tourism industry be brought under the “concurrent list” by amending Schedule VII of the Constitution of India. This will help elevate the sector to a priority one on the national agenda.
Provide Export Status for Tourism Earnings
Tourism Exports be treated at par with other exports and services and such transactions may be zero rated for GST without stopping the flow of input credits.
Conferring Infrastructure status to hotel industry
As the industry is highly capital intensive and construction of a medium sized new hotel project may require a massive capital investment, the hotel industry should therefore be declared an infrastructure industry under section 80IA/IB of the Income Tax Act 1961.This would enable the hotel industry to avail all benefits that are available to other sectors of infrastructure such as airports, seaports, power projects etc. The hotel industry should be granted infrastructure status under Income Tax Act as well as in RBI definition.
Declare hotels capex above Rs.25 Crs. capex (excluding land) as infrastructure.
“Reopening the tourism economy, restoring traveller confidence, relooking at infrastructure and hygiene, rebuilding destinations and rethinking the travel and tourism sector in the long run” PUNEET CHHATWAL, Chairman, CII National Committee on Tourism and Hospitality; MD & CEO IHCL
Creation of an Empowered National Tourism Board with Private sector involvement and Professionals
It is suggested that an independent empowered National Tourism Board (NTP) is formulated:
- An empowered Board to be set up with members of the Government/ Private sector.
- Recruit professionals from private sector with skill sets and market salaries.
- Role to create short to Long term strategies for Tourism India.
- Think of out of the box ideas to create market driven opportunities for the various constituents of the industry.
- Creation of one central body that provides all the land & project approvals and hence facilitating concept of “Single Window Clearance.”
- Simplify the licenses and approvals for hotels.
Developing Tourism through Port/Cruise Infrastructure, Aviation, Improved Road & Railway Connectivity and Infrastructure Development
- Cruise Infrastructure: To build on this market, India will need to develop infrastructure, create a viable tourism experience and streamline their regulations based on international standards that will adhere to the expectations of cruise passengers and lines. Developing a successful cruise-tourism eco-system is fundamental for this segment to thrive.
- Aviation: Direct Connectivity and Availability of seats is required and there is a need to ensure that Bilateral Air Services Agreements (BASA) should deliver the necessary capacity to achieve visitor arrivals targets. Also, there should not be any capacity constraints otherwise airfares would be expensive, and seats will be not be available – especially during the times that people want to travel – in that case tourists will simply choose another destinations.
- Improved Road Connectivity: Transport infrastructure is the lifeline of any economy. It improves the efficiency and productivity of a nation, while allowing for inclusive growth by connecting urban and rural areas. Transportation issues often affect a nation’s progress in tourism as it hinders the footfall and arrival of tourists owing the uncertainty that arises from moving between destinations. In this regard, road connectivity is one of the fundamental components to a successfully developed tourism market. Tourism planning hinges on the connectivity of different sites to create circuits that are accessible. It is primarily responsible for connecting tourism-generation regions and well-developed road infrastructure plays a significant role in the competitiveness of the economy.
- Infrastructure Development: While CII is against conversion of Industrial land to other purposes, RIICO industrial plots falling in industrial areas situated in middle of the city where hardly any industry is in operation due to transport problems, pollution and land price problems; in such industrial areas, tourism should be allowed to develop with units like, hotels, resorts, and convention centres etc. It Hence, it is requested that all benefits shall be given to all kind of tourism units which are given to general industries such as industrial tariff for electricity supply.
“While there exists demand today, more has to be done to improve confidence. One of the biggest silver linings seen is how closely the industry has come together and how well public and private partnership has responded to this crisis” DEEP KALRA, Co-Chairman, CII National Committee on Tourism and Hospitality; Founder & Executive Chairman, MakeMyTrip
Tourism should be allowed on RIICO industrial land. For Goa, there is a need to have jetties to encourage water sports and other basic amenities such as waiting halls, parking facilities at tourist places in the State.
- Improved Railway Connectivity: All major railway platforms through which international tourists travel need to have international standard washrooms and to keep them clean international passport holders to be allowed. Better connectivity can be leveraged to promote rural tourism. The towns and cities should be connected via railways, with good stations and ticketing facilities available at all places. Infrastructure of some of the present railway stations needs to be improved.
Measures to stimulate domestic demand
- Leave Travel Allowance (LTA): As per the current rules; LTA can be claimed for travel fare or tickets within India only. Expenses incurred for accommodation, or any other fee is not eligible for exemption. To incentivise domestic tourism, government may modify the rules and allow citizens to avail LTA benefit on domestic tours including travel fare or tickets and accommodation for a period of two years. Government may like to have an upper ceiling (if required).
- A 200 percent weighted exemption of all expenses to corporate on all domestic conferences.
GST measures
- GST: The current rate of taxation on MICE, (Meetings, Incentives, Conferences and Exhibitions), business makes the Indian environment less competitive. It is imperative that the government provide a zero-rating GST for MICE. This should be further expanded to the exports of goods and services to further strengthen India’s competitiveness in a global scale for a period of two years.
- GST on Domestic Tours: It is suggested that the government provide a zero-rating GST for bookings made on domestic travel and tours for a period of two years.
- GST: Extend or create new temporary exemptions or reduction of taxes i.e GST rates on accommodation, hotels and restaurants; at least for a period of two years.
• Waive off of Entry ticket waive offs: The monuments; museums; heritage tickets; national parks under the purview of any government arm may consider waiving off the entrance ticket, waive off for all Indian citizens for a period of two years
