Category Archives: Agents

Debjit Dutta, Chairman, IATO East Chapter, said that the announced tax slab on tour operators is satisfactory but because hotels are a major component of their business, the 28 per cent tax on hotels above Rs. 5000 will hit them in a bad way. “Most inbound tourists want to stay in properties that are well above the Rs. 5000 bracket. The business model for inbound is also different from that for domestic – we create our deals and packages about a year in advance and with the new tax rate for hotels, we will have to pay the 28 per cent and five per cent, in addition to the standard rate of the hotel room. This barely leaves us with any profit margin. The tax rate needs to be reconsidered since it will kill a lot of business where most of the hotels will benefit from direct booking. In addition, with neighbouring countries coming up in a big way such as Sri Lanka, the products and tax rates need to be competitive,” he added.

Claiming that applying of CENVAT credit with 9 per cent service tax was cumbersome, Pronab Sarkar, President, IATO, said, “ GST was awaited for a long time and we were demanding from the government that since there is a lot of multiplicity of taxes in the tourism sector, the taxes should be rationalised and reduced. Thus, we were hoping to be put under the lowest GST slab and get some relief. I am glad that the government has agreed to both of them and has given us the same status what we wanted with 5 per cent GST rate. Also, there is no CENVAT credit on that. We are only concerned about one aspect of hotels, as they have put 28 per cent GST on hotels over Rs. 5000 which should not be more than 18 per cent. However, the hotel industry should come out and take up this issue. The government should encourage more tourists to come and not only look for more taxes. Rather, it should look for more tourists and get a bigger chunk of foreign exchange, which will not only generate revenue but also a lot of employment opportunities in the hospitality industry.”

Chander Mansharamani, Vice Chairman, ICPB, shared that the GST slabs announced for hospitality industry will negatively affect inbound tourism immediately, deterring tourism especially when the country is in competition with neighbouring countries. “The MICE industry will be terribly hit as most of the convention facilities are only available in 5-star hotels which have room rates of Rs. 5000 or above. The high tax rate of 28 per cent will negatively impact conventions and conferences in the pipeline as well. I feel scope for manipulation has been left for the hotels where one can charge Rs. 4990 for a room and pay only 18 per cent instead of 28 per cent. Also there is confusion whether the tax will be charged on rack rate, published rate or on the negotiated rate. The whole purpose of one tax one India is defeated,” he added.

According to the GST Council, there will be 5 per cent GST on tours, said P.P. Khanna, President, ADTOI. However, he added that it is not clear whether this rate is applicable on value addition or gross amount. “In a way, the 5 per cent rate is good as we were already paying 4.5 per cent tax on the packages, and it is only 0.5 per cent more than that, which is tolerable. The service tax amendment of 9 per cent tax was more cumbersome for us, as applying for CENVAT credit was an issue, especially with small tour operators and small hotels not being systematic in generating proper invoices in our country. I think the government has taken special consideration for tour operators, as this process was difficult for us,” he shared.

According to Guldeep Singh Sahni, President, OTOAI, the government went two steps back and now they have come one step ahead with the current GST rate. He revealed, “We were giving 4.5 per cent tax before January 22, 2017 and then we had CENVAT available. After January 22, we were under 9 per cent service tax. This step disturbed our summer bookings and there was a major loss of business to international OTAs. The new rates which will be implemented after the GST council’s meeting is 5% on supply of tour operators’ services. We need to clarify the meaning of this. If it is on the profit or add-on, then it’s very good. But if it is on the total amount, then we again stand expensive by 5 per cent than our international suppliers, because if we are taxing international hotels, then we are taxing them again. As input credit is not available it has direct impact on us.”

The 28 per cent tax on hotels is going to affect not only the hotel industry, but other businesses as well, said Sarab Jit Singh, Vice-Chairman, FAITH. He added, “It is a clear way to kill the travel and hospitality industry. Secondly, GST of 5 per cent on tour operators, which was already there. However, the government should look at if they want to promote tourism or their purpose is to earn tax money from tourism instead of generating employment and earn foreign exchange from this sector. They should decide if they want the tourism industry to perish or flourish. We are tired of knee-jerk reactions that we get from the government now and then. I think the government needs to rethink the decisions on taxes. We are having a meeting with FAITH and work on a consolidated approach to talk to the government on this.”

The Government of India’s GST Council finalised the tax rates on services under the Goods and Services Tax (GST) regime at their meeting held in Srinagar, Jammu & Kashmir. The GST regime is scheduled to kick-in from July 1, and the council has approved the GST rates for services at Nil, 5%, 12%, 18% and 28%. According to the current rate, the 5% rate of GST will be levied on transport of passengers by rail (other than sleeper class); transport of passengers by air in economy class; transport of passengers with or without accompanied  belongings, by air, embarking from or terminating in a Regional Connectivity Scheme Airport;  as well as supply of tour operators’ services. There is 12 per cent GST rate levied on transport of passengers by air in other than economy class. These rates will be further subjected to vetting and would undergo some changes.

RCI recently published a new global industry white paper on the shared vacation ownership industry to help educate, inspire and support potential new entrants into the business. It is also designed to assist the media, legislators and hospitality groups to better understand the leisure real estate industry. Created to support industry growth, the Leisure Real Estate Trends & Opportunities handbook demonstrates the credibility of shared vacation ownership products and markets, helping to demystify one of the fastest-growing and established industries in the hospitality sector. “RCI has been involved in facilitating the swapping and sharing of residential leisure real estate for more than four decades,” said Dimitris Manikis, Vice President of Business Development, RCI Europe, Middle East and Africa. “We have worked with developers and investors from every walk of the hospitality and leisure real estate sectors and have seen firsthand what a resilient and robust business this is. We at RCI understand the shared vacation ownership model’s potential to grow a business base, as well as making a significant contribution to tourism revenues. For all these reasons, we felt it was important to draft a white paper that makes absolutely clear how the products work and where the opportunities lie. We see a great future for a product that offers access to a property asset – it is the perfect fit for today’s Millennial consumer mindset.” This handbook is designed to be an A-to-Z guide to the shared ownership and leisure real estate business. It contains valuable business insights into the European marketplace, as well as analysis of the global industry.

BookMyForex, a marketplace for retail foreign exchange and private remittances, will now offer travel insurance that caters to a wide range of customers with different demographic profiles, purpose of travel, etc. Sudarshan Motwani, CEO & Co-founder, BookMyForex said “Travel insurance is an extremely important aspect of planning a trip, which, unfortunately, often gets neglected as travellers are not fully aware of its numerous benefits. Travellers should choose a travel insurance plan that suits their interests well. At BookMyForex, apart from foreign exchange available at the best rates, travellers would be facilitated with an assortment of travel insurance plans which cover a wide gamut of parameters. Through our customised products catering to different individuals’ needs and preferences, we provide the most impeccable travel insurance plans so that you remain calm and enjoy your travel worry-free while we remain on the lookout for your well-being.” BookMyForex as an IRDA authorised agent offers two types of travel insurance plans- Travel Prime Coverage and Travel Elite, which comes with three categories Travel Elite Silver, Travel Elite Gold and Travel Elite Platinum and caters to all age groups, corporates and families etc.

Travkart, a unit of Holidays by Sahibji, has partnered with franchise business consulting company Sparkleminds to help with its expansion plans in India. As part of the collaboration, Travkart will offer franchising opportunities to travel agents in Tier-2 and Tier-3 cities, while Sparkleminds will provide them with end-to-end assistance in establishing and managing the franchise. Through this partnership, Travkart aims to create franchises pan-India with initial focus on North and East India and hopes to create 4 franchises by the next quarter and 100 franchises by 2020. A micro website will be created for each franchisee/travel agent to ensure differentiation, flexibility and affordable pricing based on the region of operation. In addition, Travkart will handle the digital marketing and social media management for its franchisees, creating a separate Facebook page for each city to help travel agents connect and interact with locals. All travel agents need to do to apply for a Travkart franchise is fill and submit the application form online on the Travkart website. Once they are selected as a franchisee, they will receive comprehensive assistance through the franchising process which would include step-by-step franchise management training to local partners by a qualified franchise manager. Sparkleminds will further assist Travkart to build the support systems that these travel agents franchises would need and help build trust among regional travel agents as well as customers. Commenting on the partnership and program launch, Manheer Singh Sethi, Co-founder, Travkart.com, said, “2017 will be a very important year for Travkart in terms of increasing market penetration. Our focus is primarily on expanding to Tier-2 and Tier-3 cities in North and East India in the first phase after which we will look at …