Global luxury hotel chains upbeat about future investments despite high GST

Global hotel chains like Hilton, Hyatt Hotels and Resorts, and Carlson Rezidor have reaffirmed their commitment to their future investments in India, despite the fact that these luxury hotels will be charged 28% under the goods and services tax (GST) regime.

As per some industry estimates, with a GST rate of 28% on rooms that have tariffs of Rs 7,500 and above, these luxury hotels would be paying the highest tax amongst their global counterparts, higher even than the luxury hotels in New York, London and Paris. This excludes add-on levies like municipal tax, service charge, etc.

Even then, international hotel chains are positive about their development plans here in India, taking a comprehensive approach before GST rolls out. This includes putting in place back-end systems for the revision and creating procedural manuals so that their team members are prepared for the biggest tax overhaul in the country since independence.

"Since tourism and hospitality industry is of high priority on the government's agenda, we believe that the authorities will continue to be thoughtful of the implications GST percentage has on the industry," Kaushik Vardharajan, VP (Development), at Hilton India told ET.

"Hilton continues to see great potential in India. Tourism, which accounts for 7.5% of the GDP, is the third largest foreign exchange earner for the country," he said. "We are committed to India as a key market and the last few years were dedicated to establishing the operations infrastructure, opening several hotels and building a strong development pipeline."

Development plans of Hilton in India include 18 hotels in the pipeline for its five brands, viz., Conrad, Hilton, DoubleTree by Hilton, Hilton Garden Inn and Hampton by Hilton across 11 Indian cities.

Similarly, Hyatt Hotels & Resorts will also be launching Hyatt Regency Lucknow, followed by Grand Hyatt Kochi by year end, having recently launched Hyatt Place Rameswaram.

(Image source Agoda)