India plans tax cuts, incentives for travel and tourism sector

Domestic and foreign tourists walk in front of Humayun's Tomb, one of the tourist destinations in New Delhi. Over 9 million foreigners visited India in the first 11 months of 2017, up 15.6 percent from a year ago. (Reuters)
Updated 05 January 2018
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India plans tax cuts, incentives for travel and tourism sector

NEW DELHI: India is planning to cut taxes on travel and tourism in next month’s federal budget and give more incentives to the $210 billion sector, government sources said, hoping to boost economic growth and create more jobs.
The move could add to a domestic tourism boom in the world’s second most populous nation, where low inflation and rising incomes are changing lifestyles and consumption patterns of an estimated 250 million middle-class Indians. With scores of destinations introduced on airline routes last year, air travel is also surging.
India’s tourism sector grew over 10 percent in the six months ending September, compared to near 8 percent in the year-ago period. According to an industry report, tourism employs 40 million people in India and could add 10 million jobs in a decade.
“We’ll announce measures in the budget to promote investment in the tourism sector,” a top finance ministry official told Reuters, adding that Finance Minister Arun Jaitley favors lowering a 28 percent tax on hotel tariffs, and offering incentives to attract private investments.
If the moves come about, companies expected to benefit include airlines like IndiGo, owned by InterGlobe Aviation , and Jet Airways and hotel operators such as Indian Hotels, that owns the Taj Mahal chain and EIH Ltd. that operates the Oberoi hotels in India.
Tour operators including Cox & Kings and Thomas Cook are also likely to gain.
In India tourists, on average, pay 30 percent tax on hotel rooms and travel compared with less than 10 percent in Singapore, Thailand and Indonesia, said Pronab Sarkar, president of the Indian Association of Tour Operators (IATO).
Another government official said the budget was likely to “significantly” raise allocations for tourism infrastructure and raise income tax exemptions on investments in new hotels.
A third official, who is aware of the finance ministry’s pre-budget consultations with industry groups, said Jaitley was expected to lower income tax on corporate profit, offer tax incentives on hotel construction, allocate more funds for new tourist trains and building roads to tourist destinations.
The government will offer incentives to more regional airlines this year to cover new, under-served airports, the official added.
All three officials, who spoke on condition of anonymity, declined to provide numbers or share further details.
India needs about 200,000 new hotel rooms, Tourism Minister K.J. Alphons told parliament this week.
“We have reached a plateau point and need more resources to create new infrastructure and develop tourist packages,” Alphons later told Reuters, adding there was huge potential in developing areas that were not the usual tourist destinations.
Prime Minister Narendra Modi has said developing tourism, particularly in India’s remote north-eastern states, is one of his top priorities.
Hotel occupancy levels in India are at their highest levels since 2008, even though many hotel chains have raised prices.
The need for rooms has been spotted by foreign investors with Japan’s SoftBank Group backing start-ups like OYO Rooms, which has emerged as the largest aggregator of budget accommodation across the country with hotels in over 200 destinations.
One major driver of the domestic tourism boom has been the launch in 2017 of five regional budget airlines on over 100 routes, which are given incentives by the government to offer cut-price flights to uncovered and remote areas, encouraging thousands of families to explore flying for the first time.
Domestic airlines carried 10.6 million passengers in the first eleven months of 2017, up 17 percent from the year-ago period — encouraging some established players like Spicejet , Jet Airways and Vistara, a joint venture between the Tata Group and Singapore Airlines, to start flights to new locations.
Tour operators said double-digit hikes in urban wages, coupled with an over 25 percent rise in the benchmark Sensex index last year, have contributed to the domestic tourism boom.
At the same time over 9 million foreigners visited India in the first 11 months of 2017, up 15.6 percent from a year ago.
Domestic tourists, who account for 88 percent of the sector, are increasingly using online portals for hotel and travel bookings.
Travel portal MakeMyTrip reported a 186 percent jump in hotel bookings during the September quarter and its holiday package segment that includes hotel and flight bookings, saw a 71 percent increase in revenues over the same period.
Online operators say tourism could emerge as the new engine of growth after the IT sector but that it needs government support.
“The government must lower the tax burden, ease rules and build infrastructure if it wants to ensure 15-20 percent annual growth in tourism in coming years,” said Sarkar of IATO.


A look inside Los Angeles’ movie-making machinery

Traffic and pedestrians at Hollywood Boulevard. (Shutterstock)
Updated 22 October 2018
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A look inside Los Angeles’ movie-making machinery

  • Read on for an unexpected travel guide to Los Angeles
  • This glimpse into the reality of Hollywood could come as a surprise to some

LONDON: First-time visitors to America often remark that arriving feels like stepping onto one almighty film set. The country’s iconography, look and feel is so instantly recognizable — already deeply embedded in our collective consciousness, via the land’s greatest cultural export: The movies. Which makes a visit to Los Angeles surreality squared. The home of Hollywood is at once both the most-photographed fantasyland on the planet and an uncomfortable glimpse behind the curtain, at the mechanisms and people bringing these daydreams to the world.

The mask slipped the moment I arrived, when an airport minibus spurted me out on top of a lump of faded metal etched into a grubby sidewalk, and I realized I was standing atop one of 2,627 stars making up the Hollywood Walk of Fame.

(Shutterstock)


That night I was served pizza by an aspiring opera singer, and I chatted with jobbing actresses in the coffee queue the next morning. When I brazenly strolled into a famed Sunset Boulevard rehearsal studio, rather than finding gold records on the walls I was asked, “La La Land”-style, if I was there to audition for the prestigious Berklee College of Music. I didn’t even have to look for the oily engine room beneath the star machine.

And of course, I was expecting to. Disavowing jetlag, I had booked an early slot on an arduous $139 “LA in a Day” guided two-wheel tour, from the excellent Bikes and Hikes LA — a 52km-workout through numerous neighborhoods and landmarks I knew only from the movies: from West Hollywood through Westwood to Santa Monica Promenade, down to Venice Beach and through Marina Del Rey. Peddling furiously up the titular inclines of Beverly Hills, our endlessly enthusiastic guide (and, naturally, aspiring film director) Zack pointed out gleaming once-residences of Michael Jackson, Tom Cruise and Lucille Ball.


To recover, that evening I feasted at Barney’s Beanery, the diner where Quentin Tarantino reportedly wrote much of his seminal early movies. When we asked which table he sat at, our waitress was as unimpressed as any of QT’s characters.

The next day I rested my legs, riding Starline Tours’ two-hour Movie Locations bus tour ($55), winding around a giddyingly geeky list of sights which, if you squint at them in the right light, remind you of the movies.

We glimpsed the US Bank Tower aliens obliterated in “Independence Day,” stopped at the historic Bradbury Building — its restored interior heavily exploited in the original “Blade Runner” — and visited Union Station, familiar from “The Dark Knight Rises” to “Catch Me if You Can.” We found the pond Jack Nicholson rowed through in “Chinatown” and the Hollywood United Methodist Church used as a dancehall in “Back to the Future.” Towering above was Griffith Observatory, the locale of the famous showdown in “Rebel Without a Cause.”

Spotting all these real-life sites had the jolting effect of demystifying the movies, but nothing could prepare me for my visit to the modern Warner Bros Studio, Hollywood’s biggest surviving back lot, stretching to 110 acres out of town in Burbank.

For $65 visitors can join the 1,400 people who call this giant playground their office on an official studio tour and ride a golf cart through the fake streets and makeshift neighborhoods across multiple centuries and worlds that have been brought to life in hundreds of movies.

We visited a studio where dozens of weekly sitcoms are shot in front of a live audience with factory-like precision. (Shows such as “The Big Bang Theory” can wrap in just two hours.) We saw the dull soundstages used by make-believe epics including “Inception” and “Dunkirk,” and were shown a warehouse storing real-life Batmobiles, used over three decades of “Batman” movies.

Any semblance of mystery was totally annihilated with the closing blockbuster ‘Stage 48: Script to Screen’ complex, a collection of interactive educational exhibits allowing visitors the chance to ride a Harry Potter broom in front of a green screen, hold a real Oscar, and hear the award-winning audio to “Gravity” broken down layer by layer — and even act out a scene on the original Central Perk coffeehouse set of “Friends”. As I mimed firing up a fake espresso machine at the edge of the frame and served another tourist an unbreakable plastic mug, I realized my journey inside the Hollywood machine had gone far enough. Sometimes, illusion beats reality.