Category Archives: Associations

Hotel industry let down by Budget

On hospitality failing to find a mention in Union Budget, Rajindera Kumar, EC Member-FHRAI, Former President FHRAI & HRANI, Working Director, Vivanta by Taj Ambassador, says, “The Budget spoke about every other sector except tourism which I feel is very upsetting as the matter of the fact is that anyone who comes to India or goes out from India, spends their maximum time under the ambit of tourism. The hotel industry too is very disappointed with this Union Budget. I have to say that running a hotel in not a joy anymore in today’s time.” Kumar raises some valid questions on FDI. “In case of FDI when the government can offer a single window clearance then why can’t the same be done for the hospitality industry? We can just hope to be an active part of the five Ts, with tourism being one of them under this government,” he asks.

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IATO educates members on new service tax regime

The Indian Association of Tour Operators (IATO) held an interactive meeting at the Ashok Hotel, New Delhi, for its members on the new legislation for service tax, where they had invited S.C. Kamra, Advocate and expert on service tax. Kamra made a presentation on the service tax on how the new notification will impact the tour operators. The session saw a full house with around 300 members in attendance. The presentation was followed by question and answers, where IATO members put forward their queries and problems regarding the new Service Tax norms.

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OTOAI urges FinMin to amend tax abatement for agents

The Outbound Tour Operators Association of lndia (OTOAl) has written to Union Finance Minister Arun Jaitley regarding the recent amendment in Service Tax, which would impact outbound tour markets. Explaining how the agents will not be given any input credit on the tax they pay, OTOAI has said that this would hamper the growth of the tourism industry. OTOAI has urged the finance minister to consider that the abatement available to tour operator should be amended to provide a choice to the tour operator to opt for a lower abatement along with CENVAT credit on input services or opt for a higher abatement without claiming the CENVAT credit on input services. The letter undersigned by OTOAI President Guldeep Singh Sahni reads, “As the actual margin earned by the tour operators is only 3 to 5 per cent, the increase in taxable value to 60 per cent will significantly negatively impact the sector and increase the cost of outbound tours.”

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Sustained growth in international tourism despite challenges

International tourist arrivals grew by 3.9% to reach a total of 1,235 million, according to the latest UNWTO World Tourism Barometer. Some 46 million more tourists (overnight visitors) travelled internationally last year compared to 2015. The year 2016 was the seventh consecutive year of sustained growth following the 2009 global economic and financial crisis. A comparable sequence of uninterrupted solid growth has not been recorded since the 1960s. As a result, 300 million more international tourists travelled the world in 2016 as compared to the pre-crisis record in 2008. International tourism receipts grew at a similar pace in this period (complete 2016 receipts results will be reported in May). “Tourism has shown extraordinary strength and resilience in recent years, despite many challenges, particularly those related to safety and security. Yet, international travel continues to grow strongly and contribute to job creation and the wellbeing of communities around the world”, said UNWTO Secretary-General Taleb Rifai. By region, Asia and the Pacific (+8%) led growth in international tourist arrivals in 2016, fuelled by strong demand from both intra- and interregional source markets. Africa (+8%) enjoyed a strong rebound after two weaker years. In the Americas (+4%) the positive momentum continued. Europe (+2%) showed rather mixed results, with double-digit growth in some destinations offset by decreases in others. Demand in the Middle East (-4%) was also uneven, with positive results in some destinations, but declines in others.

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Unjust tax would kill Indian tourism industry

Guldeep Singh Sahni, President, OTOAI, says “With this move, the tax for us is going to increase from 4.5 per cent to almost 9 per cent. The move will directly affect the offline tour operators within India and it will in turn be beneficial for those who take booking outside the country, as they won’t come under any such laws. Over 20 million people from India are travelling outside the country and the outbound travel industry is creating so many jobs. Taxing this sector would only affect the tour operator businesses in India and would allow anybody to operate the same business for Indians outside India. It’s an unjust tax and would kill the tourism industry in India.”

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Service charge row: FAITH seeks retraction from Consumer Affairs ministry

FAITH believes that levying of service charge on invoices is a healthy, cashless practice designed to motivate staff through an additional financial incentive. Levy & proportionate distribution of ‘service charges’ enable enhanced financial support to staff from lower economic groups. FAITH has requested ‘urgent’ intervention of Secretary-Tourism, Government of India, Secretary-Consumer Affairs, Deputy Secretary-Consumer Affairs, & Tourism Secretaries of all state governments, on the issue. The association has recommended a retraction to be released from MCA to secretaries – food, civil supplies & consumer protection. FAITH has opined, that service charges wherever they are levied on invoices, are pre-disclosed on the menu, where it normally says that ‘service charges & government taxes as applicable are extras’. Whenever consumers order, it is implied that they are legally aware of that food service establishment’s disclosed commercial policies and offer of sale. Service tax is thereafter, levied on service charge which is remitted to department of revenue and adds to our country’s indirect tax collections. Once they are disclosed and thereafter accepted by the consumer, it is thus not an unfair consumer practice. FAITH has voiced concern that the ‘letter ‘ by Ministry of Consumer Affairs may create confusion in the minds of diners when they eat out. Additionally, it has the potential to create an unhealthy distrust towards food service establishments among those diners who may not be able to discern distinction between service charge & service tax. Furthermore, if service charges start getting disputed by consumers, it may create unwanted litigation hotel / restaurants & department of revenue, since service tax is levied on all service charges on invoices. All in all, there is scope for large scale litigation & a …

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TrawellTag Cover-More to conduct training for ETAA members

TrawellTag Cover-More will conduct its Travel Agents Engagement Program (TAEP) for members of the Enterprising Travel Agents Association (ETAA) of non-IATA travel agents in Kolkata and Hyderabad in February 2017. The first session will be conducted in Kolkata on February 4, 2017 followed by Hyderabad on February 10, 2017. It will be conducted by corporate trainer Aman Kaushik who has done similar sessions for the trade in the past. Jagat Mehta, President, ETAA, says, “Our insurance partner TrawellTag Cover-More has designed a program especially for our members which is focused on up-selling and cross-selling skill development. The ‘Travel  Agents  Engagement Program’ has proved to be a productive step towards achieving higher quality of travel ancillary sales, increasing penetration and improving cross-selling skills among travel agents.” ETAA is scheduled to hold its second Domestic Convention at Leonia Resorts, Hyderabad from March 3 to 5, 2017.

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FHRAI to Consumer Affairs Department: Withdraw service charge notification

In the wake of a statement issued by the Department of Consumer Affairs on Jan 02, 2017 implying Service Charge billed by restaurants are optional, the Hotel and Restaurant Association of Western India (HRAWI) has come out with a clarification to all industry stakeholders. In a letter to the Department of Consumer Affairs, the Federation of Hotel and Restaurant Associations of India (FHRAI) the apex body of hotels and restaurants, has appealed for withdrawal of the advisory as it has been creating chaos and disruption in the smooth functioning of restaurants across the country. The association has clarified that there is nothing illegal about levying the fee and has citied judgements by the National Consumer Disputes Redressal Commission, New Delhi which is the highest consumer forum of the country as well as by the Hon’ble Supreme Court, which have upheld the legitimacy of this practice. The association has pointed out to cases in which the practice of levying a Service Charge has been upheld by the law. In one of the cases, the National Consumer Disputes Redressal Commission, New Delhi in Nitin Mittal vs. Pind Baluchi, (2012) NCDRC 444 the Association has been advised that such a practice is not an “unfair trade practice” within the Consumer Protection Act. In another case, the Hon’ble Supreme Court too has specifically acknowledged the practice of including “service charge” in the bill by hoteliers and other cases in lower courts which too have recognized the practice. “Service charge is the amount paid to the staff of the restaurant or other similar establishments. An establishment may choose to include this amount in the bill itself and the percentage may vary from 5 per cent …

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5-7% decline in hotel bookings for New Year celebrations

According to a survey by ASSOCHAM Social Development Foundation, bookings received by star-rated hotels in metros have registered a decline of about 5-7 per cent due to demonetisation and the consequent cash crunch. The survey informed that many hotels had not revised rates of New Year packages and had in fact, lowered the rates by about 2-3 per cent; bundled various offers, promotions, deals and discounts on services in one package at a bargain price. The ASSOCHAM Social Development Foundation had interacted with about 50 star-rated hotels in Ahmedabad, Bengaluru, Chennai, Delhi-NCR, Hyderabad, Indore, Jaipur, Kolkata, Lucknow and Mumbai during the course of past midnight to ascertain how top hotels in metros are gearing up for annual New Year’s Eve parties. Simultaneously, the chamber representatives also interacted with about 250 youngsters to gauge how people in urban centres are planning to bid farewell to 2016 whereby most said they plan to usher in the New Year in a cost-effective way by opting to party indoors.  “New Year’s Eve is the perfect occasion especially for the youth to unwind and soak in the festivities with their friends and family, though with ever-growing per-capita incomes people do not mind indulging in some extravagance but cash crunch in wake of demonetisation seems to an impact on their plans this time,” said D.S. Rawat, Secretary General, ASSOCHAM. He further informed  that despite this being a good season for the hotel industry, many star-rated hotels seem to be reeling under the impact of demonetisation and are being forced to scale down their New Year’s Eve activities as they are not able to draw many people.

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