Traditional hospitality majors seek level playing field with online aggregators

Our Bureau Mumbai | Updated on January 13, 2018 Published on February 17, 2017

Requests govt to come up with policy to cover ‘unregulated’ room rentals

Hotel aggregators and homestays like Airbnb are being targeted by the regulated hospitality players, who are demanding parity in taxation and uniformity in regulations to create a level playing field from the government.

The Hotel and Restaurant Association of Western India (HRAWI) has requested the government to come up with a policy to cover the ‘unregulated’ room rentals that have grown across the country.

“While five-star hotels pay a substantial 38 per cent of the room revenue as direct and indirect taxes, some of the lavish bungalows listed in hotel aggregators like Airbnb do not pay a single rupee as taxes.

“Further, over 42 licences are needed to start and operate an organised sector hotel, while the unregulated sector operates without a single licence,” says Dilip Datwani, President, HRAWI.

A hotel which charges ₹1,500 for a room, has to pay 10 per cent as luxury tax beside other taxes, but a bungalow listed in Airbnb, for over ₹10,000 a day, does not have to pay anything, claim the players. The association also questioned the relevance of subjecting hotels to administrative clearances, liquor permits and other licences which the unorganised segment like homestays, providing the very same services, are exempted from.

“The hospitality industry without these unregulated home stays in Maharashtra can generate almost ₹600 crore per extra night when a foreign tourist decides to stay back to the Government as foreign exchange earnings.

“The government will have to consider, either allowing hotels to operate with the same relaxations as would be given to these aggregators and unregulated homestays, as they are not treated equally, there can’t be a first among equals,” added Kamlesh Barot, ex-President, Federation of Hotel and Restaurant Associations of India.

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Published on February 17, 2017
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