Ibis and Ibis Styles India, prominent players in the hospitality sector, are optimistic about the potential growth stemming from recent discussions on GST amendments. The hotel chain believes these changes could significantly impact the industry, which has long advocated for GST reforms.

Industry Expectations

Tejus Jose, Director of Operations at Ibis India, expressed enthusiasm about the proposed GST amendments. The company anticipates that if the benefits of these reforms are passed on to customers, it could lead to an increase in travel, thereby boosting the hospitality sector.

Travel Trends

Ibis India reports encouraging trends in the travel industry:

• Domestic leisure travel has surpassed pre-pandemic levels
• Business travel is showing steady recovery
• Corporate bookings have returned to pre-pandemic levels

Sustainability and Expansion

The hotel chain has made significant strides in sustainability:

• Nearly all Ibis properties in India have achieved Green Key certification
• The company is exploring new revenue streams, including weddings and social events for up to 300 guests

Ibis India continues to assess expansion opportunities in underserved Indian markets while focusing on cost efficiency and margin improvement.

Industry Outlook

The hospitality sector in India appears to be on a path of recovery and growth. With the potential GST amendments and the return of both leisure and business travel, companies like Ibis are poised to capitalize on these positive trends. The industry's focus on sustainability and diversification of offerings suggests a strategic approach to long-term growth and resilience in the post-pandemic era.

The Federation of Hotel & Restaurant Associations of India (FHRAI) has put forward a comprehensive five-point reform plan to the GST Council, aiming to provide much-needed relief to the hospitality sector. This strategic move comes as the industry seeks to enhance its contribution to India's economic growth and align with the country's Vision 2047 goals.

Key Demands of the Reform Plan

1. Uniform 5% GST Rate: The FHRAI is advocating for a standardized 5% GST rate across all hospitality services, coupled with Input Tax Credit (ITC).

2. Reclassification of Hotel Rooms: The association proposes recognizing hotel rooms as Plant & Machinery, which would allow Input Tax Credit on renovations.

3. Delinking F&B GST from Room Tariffs: A call to separate the GST on Food & Beverage services from room tariffs.

4. Raising GST Threshold: The plan includes a suggestion to increase the 18% GST threshold on room tariffs from ₹7,500 to ₹15,000.

5. Regularization of Past GST Payments: The FHRAI is seeking to regularize past GST payments, potentially easing the financial burden on hospitality businesses.

Economic Impact of Tourism

The FHRAI has highlighted the significant economic impact of the tourism sector:

• Contributes over 5% to India's GDP
• Every rupee invested generates ₹3.50 in output
• One direct job in the sector supports 3.20 indirect jobs

Potential Benefits of GST Rationalization

The association believes that a rationalized GST structure could have far-reaching benefits:

• Potential to double the sector's contribution to GDP
• Support in achieving Vision 2047 goals
• Enhance overall economic growth and job creation

The FHRAI's proposal comes at a crucial time as the hospitality industry seeks to recover and grow in the post-pandemic era. By addressing key taxation issues, the sector aims to become more competitive, attract investments, and contribute more significantly to India's economic landscape.

As the GST Council considers these proposals, stakeholders in the hospitality industry are hopeful that the reforms will pave the way for sustainable growth and increased economic contribution in the years to come.