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.


Sensational Sikkim: Exploring the unspoiled wilderness from Chumbi Mountain Resort

The Chumbi Mountain Resort. (Supplied)
Updated 15 January 2019
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Sensational Sikkim: Exploring the unspoiled wilderness from Chumbi Mountain Resort

  • Chumbi Mountain Retreat is located in India, in the northeastern state of Sikkim
  • The retreat is both a luxury resort and a repository of traditional culture and craft

DUBAI: At the ungodly hour of 6 a.m., I was awoken by a phone call from reception. “Madam, we have a really clear view of Kanchenjunga mountain this morning, so Mr. Chopel has asked us to wake you, so you can see it,” said a disembodied voice, apologetically but with a sense of urgency.

I smiled and flung open the curtains, and there it was. The majestic Himalayan mountain — the world’s third-highest — looked like it was right outside my bedroom window, within touching distance. Clustered with its neighboring snow-clad peaks, it sparkled a bright white, against the impossibly blue skies.

General view of Kanchenjunga mountain.(Shutterstock)

That’s the kind of thing that you don’t mind dragging yourself out of bed — and barefoot onto the cold stone terrace — for; to capture that perfect photo before the fleeting view disappears behind a veil of clouds.

And it’s the kind of personal touch that makes the Chumbi Mountain Retreat special. Owner Ugyen Chopel (a filmmaker and prominent local personality) has made it is his mission to showcase this little-known corner of paradise to the world.

The retreat is situated in India, near the Himalayas in the northeastern state of Sikkim — the country’s second smallest and one of its youngest, having remained a Buddhist monarchy until as recently as 1975. Sikkim has a rich and unique heritage, as well as the more recent distinction of being India’s first fully organic (in terms of agriculture) state.

Nestled in the hills of Pelling in western Sikkim, Chumbi Mountain Retreat is both a luxury resort and a repository of traditional culture and crafts. The traditional monastic design and motifs recreated using natural materials such as local stone and wood, in an artisanal approach, and the many hand-picked historic artifacts used in the décor make staying in this serene hideaway an immersive experience.

Nowhere is this truer than at Dyenkhang, an intimate specialty restaurant offering authentic local cuisine in the traditions of the royal palace. It’s the only place in Sikkim offering this kind of meal, I was told.

The food is served in a traditionally reverential manner — the servers are meant to never show their back to the diner — on gleaming copper tableware, the fit-for-a-king feast includes phing zekar (glass noodles with marinated local greens); chu zhema (cottage cheese dumplings); gundtruk sadako (fermented greens tossed with onion and chilli); and phyasha saltum (chicken cooked in traditional herbs).

The fresh, organic produce ensures each dish bursts with flavor. But dinner here is as educational as it is delicious, providing an insight into the many influences that went into shaping Sikkimese culture and cuisine.

Another great way to experience that local culture is with a traditional ‘Dottho’ hot-stone bath in the resort’s zen-like Mhenlha Spa. An Al-fresco soak in a wooden tub with heated mineral stones added to the water together with local herbs makes for a healing, hugely relaxing experience — aided by a fermented rice drink which you are meant to sip throughout.

With its vantage point boasting panoramic views across the valley, and with numerous nooks and communal spaces to relax in, guests may be tempted to simply stay in the resort for the duration of their trip. But that would be a shame, as there is a great deal more to see in this unspoiled region.

From the scenic Khecheopalri Lake (which, local folklore has it, has the power to grant wishes) and the impressive perennial Kanchenjunga waterfall, to the sacred Pemayangtse monastery — a mountaintop Buddhist temple where fluttering prayer flags and meditative chanting create a rarified atmosphere of tranquility — excursion options abound. For the more adventurous, trekking and hiking trails are also available nearby, as are farm tours.

Kanchenjunga waterfall. (Shutterstock)

Truth be told, this isn’t the easiest place to get to or around — the roads aren’t great and Sikkim’s overall infrastructure is still developing. But those making the effort to visit this remote land will be rewarded with stunning alpine landscapes, great hospitality from unaffected, friendly people, and an inescapable sense of spiritual wellbeing. And, who knows, maybe even an elusive sighting of some of the world’s greatest mountain peaks.