HRAWI TO MEET CHIEF MINISTER WITH WISHLIST FOR HOSPITALITY SECTOR

 New Government in Maharashtra Brings Hope To The Beleaguered Hospitality Industry

Mumbai: The hospitality sector, which is going through one of its worst ever economic downswings, is hoping for a reversal of trends with the formation of the new Government in Maharashtra. It is expecting the introduction of rational policies and stronger infrastructure creation that will go on to boost the tourism and hospitality industry in the State.

“As soon as the Government settles in, we will be meeting the Chief Minister and the Tourism Minister with vision for the hospitality industry. In the last twenty-five years every successive Government has regularly raised taxes, introduced new taxes and increased procedural requirements. In turn, the industry has suffered. Our request from the new Government is that the tax structure and policies be rationalized; otherwise, the hospitality sector which is bleeding badly, will bleed to death,” says Mr. Bharat Malkani, President, Hotel & Restaurant Association of Western India (HRAWI), the apex body of hotels and restaurants.

The association has identified seven key issues that it would take up with the Chief Minister on behalf of the hotel industry.  The issues include single window clearance for licenses; eliminating duplication of certificates that need to be taken from Food Safety & Standards Authority of India (FSSAI) and local bodies, municipality and municipal corporations; rationalization of room rates by increasing hotel rooms; developing  Swachh Bharat and sewage treatment policies for cities and towns; skill development through the ‘Hunnar Se Rozgar’ program and apprentice harmonization; rationalization of entertainment tax and the capital value tax system.

Talking about the industry’s existing scenario Mr. Malkani says, “Currently, all kind of direct and indirect taxes are levied on the hospitality industry. Some of the taxes like (entertainment tax and luxury tax) amount to duplication and some like the new property tax valuation system are irrational. For every four nights a tourist stay in Mumbai the tourist pays one additional night stay in taxes alone! This makes staying in Mumbai prohibitive for tourists and they use the city merely as a transit point instead of as a tourist destination like most other cities in the world.”

Another challenge the industry has been facing is that new laws are not replacing existing ones, but duplicating them... Post introduction of the FSSAI Act, it became obligatory on all Food business Operators (FBOs) to acquire license under this Act. “But this did not trickle down to the local bodies and Municipalities. FBOs now need licenses from both the Health departments and under the FSSAI Act, which amounts to duplication. While we have been appealing to the Government to provide guidelines to the local bodies on the FSSAI Act, the nature of the problem reemphasizes the need for Single window clearance for hotels,” elaborates Mr. Malkani.

 “The hospitality industry is the highest creator of jobs, is the highest tax generating source, one of the highest foreign exchange earners and one whose growth trajectory can outpace the growth of several other industries put together. With a little bit of vision and support from the Government, this industry can easily increase its contribution to the GDP and play a much bigger role in its progress,” concludes Mr. Bharat Malkani.

About Hotel & Restaurant Association Western India (HRAWI)

The Hotel and Restaurant Association (Western India) is a 64 years old Association of Hotels and Restaurants in Western India. Its members include smaller Hotels up to 5-Star Deluxe categories. The bulk of its members, like any growth economy is made up of budget hotels. With around 1300 members across Western India, HRAWI covers Maharashtra, Gujarat, Madhya Pradesh, Chhattisgarh, Goa and the Union Territories of Daman, Diu & Silvassa, and is considered to be the voice of the Hotel Industry. The association is part of the national body of Federation of the Hotels & Restaurants Associations of India (FHRAI), located in New Delhi, which was originally founded in Mumbai in 1950 by the late Mr. J.R.D. Tata.