Budget 2024: What should the hospitality sector in India expect this year?

Every Indian is waiting eagerly for February 1 as the Budget 2024-25 is due on this date. Expectations are really high this time! The hospitality sector in India is also expecting some favourable words from the policy makers. Being one of the prime billion-dollar industries, the hospitality sector contributes majorly in the growth and development of the country.

The government has been making efforts to enhance the tourism and hospitality sectors. Initiatives such as Swadesh Darshan and Dekho Apna Desh have played an important role in fortifying domestic tourism. A number of international events were hosted in 2023 in India including the prestigious G20 Summit and the Cricket World Cup.

These events played an important role in putting India on the global map as a preferred destination for business and holiday purposes. These contributed to the growth and recognition of India as a colourful, beautiful and one of the prominent countries to explore in the world!

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So what are the hospitality sector’s pre-budget expectations?
Talking about India’s potential, Chirag Agrawal, Co-Founder of TravClan said, “India is bestowed with natural resources along with a very rich history. However, a lot of our tourism-friendly locations require proper development and channelization. To build from scratch will take a lot of investment which alone for the private sector might not be commercially viable. The government should provide financial and policy support - it will improve the scale and pace of development.”

He further said that the Indian government can fast-track development/investments in airport infrastructure and road connectivity projects. Some of our infrastructure is reaching its peak capacity soon and that traveller experience should not be impacted.

He also praised the government's initiatives like Digiyatra and called it a welcome move by tourists and the industry. “It is a global first. The government should continue to adopt and invest in technology that can improve the traveller experience," he added further.

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Another important point of anticipation is a potential reduction in Goods and Services Tax (GST) rates for hotels, which as of now stand at 18 percent. If this proposal is accepted, it has the potential to make travel more pocket-friendly.

The other proposal is the consideration of granting infrastructure industry status to hotels. This move holds the promise of facilitating easier access to long-term financing, acting as an important tool for the expansion in the sector.
There’s no doubt that there’s a great potential for growth in the hospitality sector. According to a report by the Hotel Association of India, the Indian hotel market holds immense growth prospects, with the potential to contribute $1504 billion to the country's GDP by 2047!

As the hospitality industry continues its expansion, it becomes crucial for the government to implement substantial measures that will help increase its development further. The concerted efforts of the government are essential to utilising the economic benefits and ensuring the sustained growth of the Indian hotel market in the coming time.

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