Government’s stance on GST rates involving 4 and 5-star hotels needs a serious reconsideration, said S P Jain, Managing Director, Pride Group of Hotels. He suggested that the government needed to be more proactive in recognising tourism as a crucial driver for national growth and bringing tax rates at par with the best performing nations was going to add muscle to India’s standing as a destination. In an exclusive telephonic interview with BITB, he spoke on a range of issues, including the business strategy of the hotel group and stressed that India’s position on tax rates was costing businesses dearly and driving tourists away from Indian shores.
High taxes hampering growth, businesses
While there may some appreciation for the government, from certain quarters, for having done away with the multiplicity of tax structure by introducing GST, high tax slabs for four and five-star hotels were acting as a detriment for the growth of the hospitality and tourism industry, stressed S P Jain. He insinuated that the government had “not yet recognised tourism as a vital asset for generating employment and foreign exchange earnings” – which was evident with high tax rates. He noted that countries neighbouring India had put in place far more conducive tax structures and were reaping the benefit by attracting larger number of tourists.
Sharing his thoughts on the caveat around providing a hotel with infra status, he lamented that the ceiling of INR 200 crores was arbitrary and supplemented his argument by noting that a project costing lesser than INR 200 crores was equally an infrastructure project in creating value at the grassroots. He argued that policy makers were viewing hospitality industry, 4 and 5-star hotels in particular, as “matters of luxury” which was contrary to their contribution towards national growth.
Domestic travel continues to drive footfalls
Speaking on the trend in footfalls at the Pride Hotel Group, S P Jain stressed that the domestic segment of travel had seen “considerable growth” in the past few years and it was being reflected in the quantum of India travellers visiting Pride Hotel properties. He, however, was quick to add that as an Indian hospitality company, Pride Hotel Group was offering “specialised service” to India travellers, indicating that the hotel group was largely geared towards serving the domestic segment. “As much as 70 percent of our total footfalls are domestic travellers, including business travellers. We get around 30 percent footfalls from foreign tourists in out upscale brand Pride Plaza and around 15 percent international traffic in our 3-star brand, rest is all driven by domestic travellers” he detailed.
Giving his take on tourism minister’s plan of doubling international inbound and foreign exchange revenue from tourism in the coming three years, S P Jain exuded confidence, noting that “it was very possible” to achieve the milestone and stressed that India’s perception as a destination in the past few years had grown rapidly. He argued that disruptions like terrorism were happening the world-over and no nation was immune to such disturbances. He also attributed India’s growing stature in international arena to “enhanced outreach and political stability.”
Pride group to expand to Manali, Mumbai and South Goa
After having thrown open the gates of Pride Plaza in Delhi for consumers – it is the largest property of the Pride Plaza group and has an inventory of 385 rooms – the hotel has recently unveiled new properties at Indore and Puri and plans to launch a property in Manali in the coming two months. “The property in Manali will be a 4-star plus hotel and will have 55-60 rooms. The renovation work is on in full swing and it will be done soon,” he shared. While Manali is aimed primarily at catering the leisure segment, the newly launched property in Indore is geared towards the convention business and features a 35000 sq. ft. lawn, we were told. “Pride Hotel and Convention Centre Indore features 80 rooms for now but we plan to expand it to 200 rooms in the future, depending on the response we get from the market,” S P Jain explained. He added that Indore had been doing “very well” in terms of business and the market was growing steadily, thanks to the growing propensity of people to spend more. Further, the group was eyeing a property in Mumbai and South Goa in the coming two years, he shared. “We are planning a 300-room hotel in Mumbai. Also, we have seven acres of land in South Goa which we will use to open a three-star property located near the Leela Hotel,” he added, giving us a detailed insight in to the Pride Hotel group’s plan ahead.