Global economic recession badly affecting Tourism sector

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Panaji, Aug 4 (UNI) The hospitality sector today pleaded for rationalising tax structure in order to compete with other countries in Asia, particularly when the tourism sector is experiencing a slump this year due to global economic recession.

The tax component on every 100 rupees paid by a tourist in India accounts for 52 per cent as against 12 to 18 per cent in South East Asian countries including Sri Lanka. The industry questioned the authorities as to how the sector could compete in this environment.

The tourism sector has been contributing 32 per cent to the GDP.

Goa alone contributes 33 per cent to the state economy. Hospitality sector itself contributed half of Rs 3000 crore revenue generated by the state.

Disclosing this to mediapersons today ahead of one-day tourism meet to be held here on August 8, Travel and Tourism Association of Goa (TTAG) president Ralph de Sousa said the occupancy rate had witnessed a downfall between 15 and 20 per cent, even as the hospitality sector had reduced the tariff by 20 per cent in the state due to slump.

The 15 to 7 per cent decline in industrial growth and heavy surcharge on aviation turbine fuel (ATF) had its own impact on the tourism industry. The flight operators had reduced their flights from 42 to 25 flights per day to and from Goa as a result.

The decrease in number of tourists from Britain was significant this time because of inordinate delays in issue of visas by the Indian Embassy in London due to outsourcing and bad international media publicity regarding safety of foreigners in Goa.

He said the industry was pleading with the Indian Embassy to issue tourist visas valid for two years instead of the current six months to encourage the British to visit India in a big way.

The Indian tourism industry, he said, could compete with other countries, particularly South East Asian countries and Sri Lanka, if the authorities reduced the tax on the hospitality sector.

The tax component on the sector accounts for 52 per cent including 43 per cent local and state taxes and fees in India as against 12 to 18 per cent in other countries. The taxes on the sector were innumerable apart from various fees on the industry, Mr de Sousa added.

The decline in industrial growth and levy of fringe benefit tax had added misery to tourism sector with people preferring to avoid travel.

Rate of interest on mortgage had also resulted in a heavy burden on the people making them avoid travel and holidaying.


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