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.


First space tourist flights could come in 2019

Updated 13 July 2018
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First space tourist flights could come in 2019

WASHINGTON: The two companies leading the pack in the pursuit of space tourism say they are just months away from their first out-of-this-world passenger flights — though neither has set a firm date.
Virgin Galactic, founded by British billionaire Richard Branson, and Blue Origin, by Amazon creator Jeff Bezos, are racing to be the first to finish their tests — with both companies using radically different technology.
Neither Virgin nor Blue Origin’s passengers will find themselves orbiting the Earth: instead, their weightless experience will last just minutes. It’s an offering far different from the first space tourists, who paid tens of millions of dollars to travel to the International Space Station (ISS) in the 2000s.
Having paid for a much cheaper ticket — costing $250,000 with Virgin, as yet unknown with Blue Origin — the new round of space tourists will be propelled dozens of miles into the atmosphere, before coming back down to Earth. By comparison, the ISS is in orbit 250 miles (400 kilometers) from our planet.
The goal is to approach or pass through the imaginary line marking where space begins — either the Karman line, at 100 kilometers or 62 miles, or the 50-mile boundary recognized by the US Air Force.
At this altitude, the sky looks dark and the curvature of the earth can be seen clearly.
With Virgin Galactic, six passengers and two pilots are boarded onto SpaceShipTwo VSS Unity, which resembles a private jet.
The VSS Unity will be attached to a carrier spacecraft — the WhiteKnightTwo — from which it will then detach at around 49,000 feet (15,000 meters.) Once released, the spaceship will fire up its rocket, and head for the sky.
Then, the passengers will float in zero-gravity for several minutes, before coming back to Earth.
The descent is slowed down by a “feathering” system that sees the spacecraft’s tail pivot, as if arching, before returning to normal and gliding to land at Virgin’s “spaceport” in the New Mexico desert.
In total, the mission lasts between 90 minutes and two hours. During a May 29 test in California’s Mojave desert, the spaceship reached an altitude of 21 miles, heading for space.
In October 2014, the Virgin spaceship broke down in flight due to a piloting error, killing one of two pilots on board. The tests later resumed with a new craft.
The company has now also reached a deal to open a second “spaceport” at Italy’s Tarente-Grottaglie airport, in the south of the country.
Branson in May told BBC Radio 4 that he hoped to himself be one of the first passengers in the next 12 months. About 650 people make up the rest of the waiting list, Virgin said.
Blue Origin, meanwhile, has developed a system closer to the traditional rocket: the New Shepard.
On this journey, six passengers take their place in a “capsule” fixed to the top of a 60-foot-long rocket. After launching, it detaches and continues its trajectory several miles toward the sky. During an April 29 test, the capsule made it 66 miles.
After a few minutes of weightlessness, during which passengers can take in the view through large windows, the capsule gradually falls back to earth with three large parachutes and retrorockets used to slow the spacecraft.
From take-off to landing, the flight took 10 minutes during the latest test.
Until now, tests have only been carried out using dummies at Blue Origin’s West Texas site.
But one of its directors, Rob Meyerson, said in June the first human tests would come “soon.”
Meanwhile, another company official, Yu Matsutomi, said during a conference Wednesday that the first tests with passengers would take place “at the end of this year,” according to Space News.
SpaceX and Boeing are developing their own capsules to transport NASA astronauts, most likely in 2020, after delays — a significant investment that the companies will likely make up for by offering private passenger flights.
“If you’re looking to go to space, you’ll have quadruple the menu of options that you ever had before,” Phil Larson, assistant dean at the University of Colorado, Boulder’s College of Engineering and Applied Science, said.
Longer term, the Russian firm that manufactures Soyuz rockets is studying the possibility of taking tourists back to the ISS. And a US start-up called Orion Span announced earlier this year it hopes to place a luxury space hotel into orbit within a few years — but the project is still in its early stages.