GST and lack of input credit followed by some other factors have affected the profitability of inbound tourism this year as compared to last year when a record 10 million inbound tourists were reported visiting India. IATO, The Indian Association of Tour Operators, which is the apex body for tour operators and standalone travel agents, reported that the profitability of inbound tourism is static this year as several other factors, apart from GST and lack of input credit, has affected it. The other factors which impacted the profitability are :
- A Considerable Increase In The Visa Fee In July From $50 To $80
- Increased Flight Charges
- Lack Of Seat Availability
- Lack Of Structured Tourism Promotions
- The Communication Gap Between The Government And The Tour Operators
- Safety Concerns In India
The president, IATO, Pronob Sarkar, said that all the above factors are being discussed with the ministry of tourism.
The tour operators are concerned about the avoidance of Tourism department by the government and lack of communication between them. As evidence that the visa fee was increased without any intimation to the tour operators. Also, they complained regarding GST taxes and said that tour operators are not allowed to take input credit on the 5% GST tax while the tax on hotels, transport etc are being paid by us. No input tax credit is available for tour operators.
R Parthiban, director at Delhi headquartered Swagatam Tours which has offices in Mumbai, Chennai and Bengaluru insisted on the requirement of structured tourism promotions.
Though the Tourism operators have ventured in new markets and that business has started showing growth but the legacy business for traditional source markets is down, reported the joint managing director of Creative Travel, Rajeev Kohli, who has specialization in inbound travel.
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CAPA, the India Inbound Tourism report declared that since the last three years India has lost market share in five of the 10 source markets especially in the countries like UK, France, and Sri Lanka. The Indian tourism is showing a constant low in terms of growth which was only 8% last year if the visitors from Bangladesh are excluded, as the vast majority of them did not come as inbound tourists.
The estimated figure from the source CAPA reveals that only 2.4-2.6 million people visit India each year for leisure and holidays which is far less as compared to a city-state like Singapore or the island destination Bali or Thailand that is 31 million.
The alarming condition of tourism in India is evident from the fact that January onwards 7-8 tourism offices have been closed. There is just one office in Germany for entire Europe. Plans are there for more aggressive promotions and setting up of agencies. But, there should be assured for other steps before taking the decision of closing the existing channels said R Parthiban, director at Delhi headquartered Swagatam Tours.
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The CEO of Mercury Himalayan Explorations, Akshay Kumar said that our business from Australian market has marked a fall, on the other hand, the UK market has been shut down. The Adventure travel department is feeling the heat as there are state-centric bans and regulations for this area. He further added that the considerable increase in the taxes within tourism for transport, hotels, and restaurants is complicated. Altogether, Indian Tourism is in a dark phase and needs Government concerns.
