Sunder Advani, Chairman, WTTCII has recently made a strong pitch for scaling down GST rates, besides recommending targeted marketing campaigns to drive inbound. Excerpts from his conversation:
Tourism had not been accorded the deserving attention, considering that the industry was supporting 26 million jobs and accounted for 9.4 percent of the nation’s GDP. Sunder Advani “hoped” the government would support the industry with some incentives, insisting that tourism was a “vital part” of the nation’s economy. Tourism industry was not an “elitist industry,” he proclaimed, suggesting that the industry was consistently being classified as being “elitist”. He added that diamond and jewellery industries were also “elitist” by that measure and yet were being charged only 3 percent GST while hotels were being taxed at 28 percent. He also compared tax slabs with the aviation industry, suggesting that the hotel industry had being handed out a harsh deal. He reiterated that it would deter international inbound into India, especially as neighbouring countries were paying a comparative meagre sum of only 6%.
He believed that India had a “competitive advantage” because of low labour rates and the country could register much larger numbers of inbound travellers than “nine million tourists.” He noted that India was comparatively less expensive, and tourists had “much to see and do.”
Targeted campaigns critical for India
Listing out of some of the key challenges, he suggested creating targeted marketing campaigns in specific markets, after employing detailed research to maximize outcome. Explaining, he stated that merely marketing that “India is a great country” was not going to drive traffic. He believed that India had better beaches than Hawaii and Bali, but they were not being adequately promoted. He added that industry needed to market what any traveller could realistically expect at the destination. He also advised for “more immigration offices” to provide tourists with a more hassle-free experience, besides supporting general augmentation in infrastructure.
Sunder Advani recommended setting up an agency to manage image perception. “We need to have an agency to tackle every bad news about India,” he said. He suggested that it would act as a “damage control mechanism.”
High GST rates will kill the industry
Appreciating the e-visa mechanism, he said it was “a great initiative” but much more could be done. He mentioned that Thailand and Singapore were charging 6 percent GST while India was charging 28 percent GST – which was driving not only foreigners but even domestic tourists to their shores. “It would absolutely kill the industry,” Sunder Advani stated. He reasoned that an increase in tax rates did not mean a growth in revenue and mentioned that President Trump had reduced tax rates from 25 to 21 percent in the USA, eying investments, and business. He batted for India taking a similar route.