Hotels body pushes for infra status – The Hindu BusinessLine

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According infra status will help the sector access funds at improved rates, says Association

Hotel Association of India (HAI), the apex body of the hotel sector in India, met Tourism Minister G Kishan Reddy, to reiterate its request for ‘infrastructure’ status for hotels.

“The Ministry and the government have acknowledged the industry’s long-standing demand and have recently initiated a dialogue to address the same,” HAI said in a statement.

The Association highlighted the fact that according infra status will help the hotel sector access funds at improved rates, which, in turn, will reduce the long-gestation period of hotels.

Hotels are highly capital-intensive. They also require renovations and refurbishments at regular intervals to maintain standards and match global benchmarks.

Like ports, highways, railways, hotels too are providers of key tourism infrastructure. Hotels have been featured as a sub-sector of social and commercial infrastructure in RBI’s harmonised master list of sub-sectors.

Post-pandemic revival

However, the hotel sector is not eligible for benefits like tax holidays available to other infrastructure sectors. In addition, there are restrictive provisions of star category, location and capex costs. The challenge before the sector is to get infrastructure status for all categories of hotels located anywhere in India.

To aid the sector’s post-pandemic revival, the association has recommended that hotels with a capex of Rs. 25 crore and above (excluding land cost) be accorded infrastructure status. Hotels are now paying commercial interest rates. The non-availability of soft credit has been one of the significant roadblocks for investments in the hospitality sector. Infrastructure status will attract investments even from MSMEs.

Rapid growth of hotels in all categories — budget, first-class and luxury — is essential to meet the ministry’s growth targets for India tourism. A robust hospitality industry should serve the needs of all kinds of tourists — pilgrims, business travellers, leisure travellers, domestic or international travellers.

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