‘There is need for composite tax in place of multiple taxes’

The president of Hotels & Restaurants Association of Northern India (HRANI), Rajindra Kumar, has proposed the department of tourism to consider a single tax regime. By Praveen K Singh

Rajindra Kumar

What are the biggest challenges for the hospitality sector in the region amidst the hype and hoopla of Commonwealth Games?

We are not just looking at the Commonwealth Games but the total scenario. The present situation requires more rooms even under normal circumstances. I believe that an immediate solution for the problem of shortage of rooms is to increase FAR of the existing four-star and five-star properties since these hotel categories are equipped to build more rooms.

For the categories one to three, there needs to be more incentives sanctioned in terms of tax sops and interest-free loans to regulate and to upgrade themselves to the industry standards. At the moment, there is a huge gap in terms of service between four to five star and hotels of one, two and three-star category hotels. We need to cater to all segments and need to offer choice to tourists travelling in the country. As of now, tourists are forced to stay in four and five-star hotels due to the imbalance created between top categories and lower segment of hotels. To my surprise, there is a paucity of four-star hotels as well. We also need to get the guesthouses regularised, which will add to the available room count in the country.

How do you see the growing manpower crunch affecting the sector?

Retention of manpower has always been a tough task. But of late the industry has started understanding how to hold talent. Having said that, there is a need for more skilled manpower. For instance, FHRAI-IHM situated in Greater Noida is offering different courses in hospitality management.

More specialised courses will help the industry to produce required manpower. Thus, hotel management institutes need to design more tailor-made courses.

What trends do you foresee in the hospitality sector in your region?

Today, it is the DDA and other land authorities that are sanctioning hotel plots of not less than three to four acres. Any new project needs to be sustainable in order to be successful in the long run. So one has to go for mixed use by constructing shopping centres, specialised hospitals and other interests around the property to make it profitable and sustainable. This trend is fast catching up in the region but has a long way to go.

How prepared are you for the FHRAI convention?

According to me, since it is away from Delhi it will not be able to attract the cream of Delhi, ministers and government officials. Otherwise, they will be probably able to get local CMs, governors and local ministers. Few people are expected to participate. Delhi would have been better as it would have attracted the who's who of the industry.

What role do you think the government can play in furthering the growth of hospitality in north India?

There is a need for a composite tax structure in place of multiple taxes. I have initiated a dialogue with the department of tourism, government of India that we need to have a single tax structure. Let us start this drive through government of India within these nine states of the northern region and follow a single tax regime as is being practiced in the European Union. For example, luxury taxes vary to a great extent from state to state. Similarly, tourists transfer taxes is again a big pain.