GST won’t have much impact on airfares or hotel rates, say travel agents

Leading online travel agents like Cleartrip and have claimed that the new goods and services tax (GST), which will be rolled out from tomorrow onwards, will not have much of an impact on flights or hotel fares in the coming months.

GST council has decided to tax both economy and business class fares at marginally different rates as compared to the present charges. Also, hotel tariffs for mid-market and budget segments are also not going to have a significant change. This has led to travel agents deciding to continue their discounts, sales and other incentives even after GST.

"It's fairly positive for aviation and budget hotel segments. Overall, it's a mixed bag and that's good news for us. Economy class effective tax is coming to about 5% which means a marginal reduction. There is a marginal increase in business class fares from 9 to 12%. Overall, we don't see the discounting intensity coming down," Amit Taneja, chief revenue officer at Cleartrip told ET.


"There's nothing much that will change post GST for consumers. Economy fares may go down slightly. Business class will also increase by 2-3%. Hotels should not have much of an impact on the consumer side. We do not expect the pricing aspect and promotions to get impacted much, post GST," said Sharat Dhall, COO, B2C,