Boosting hospitality standards key to retain big events in India

India has taken several initiatives to boost the tourism sector, which is one of the largest employers in the country. This has resulted in more traffic of domestic visitors. There has also been improvement in international tourists.

However, much needs to be done given many small countries are way ahead in terms of their contribution to the GDP. In a conversation with the BizzBuzz, the President of the Federation of Hotel & Restaurant Associations of India (FHRAI), Surendra Kumar Jaiswal said that the country requires more quality properties in both premium and budget segments. He said that the association has urged the government to extend the infrastructure status given to hotel projects across India than restricting it to only 50 cities.

According to him, the association is in talks with restaurant intermediaries and hotel aggregators to resolve the high commission charged on their members. In a unique initiative, the association is engaging with Farmers’ Producers’ Associations to directly procure farm produce from farmers. He said that India needs to do more for keeping large weddings and corporate events within the country, for boosting the growth of the tourism sector

How is the overall demand environment in the hospitality industry as of now? Is it better than last year?

July, August and September period is considered lean time for the industry. Now, weddings are going on. November is going pretty well (in terms of business) for the hospitality industry. Occupancy levels are good. This is happening across India.

However, wedding dates for this year are lesser than last year. So, we have to see the business coming from weddings.

Holiday season is going on and India has seen rising inbound traffic as more people travel within the country. How do you see the rising domestic travel, pushing the growth of hospitality industry?

After COVID pandemic, we have seen increase in domestic tourists. Habits of guests are improving and it is happening all over India. As far as corporate events are concerned, these are, of course, happening. But there is shortage of space because of wedding dates.

That is the reason many such events are happening on weekends. Because wedding venues are booked much beforehand.

Multiple reports have come up saying that there is shortage of quality properties in the hospitality sector. What is your opinion about this matter?

There is shortage of rooms in entire India. It is in every segment- be it premium or budget. That has to be taken care of. Ease of doing business has to be improved. The government is trying and has taken several steps but there is still huge requirement of inventory.

Government has already given infrastructure status to the hotel industry but it is restricted to only 50 cities all over India. If you see, most of the top tourist destinations have been fairly developed. The idea is to develop new venues, and tourist destinations.

We have requested the government in the budget proposal to extend the infrastructure status to all places in India. We have also urged the government that the threshold for giving infrastructure status on a hotel project should be brought down to Rs 10 crore.

The government is trying very hard to promote the tourism sector as this is the sector, which can provide maximum growth to the GDP. There are certain countries whose economies depend entirely on tourism sector.

The Finance Minister has already started the consultation process for next year’s budget. What are your expectations from the budget? What kind of proposals are you going to present to the FM?

Tourism sector has to be promoted intensely for maximum generation of revenue. So, the best of the facilities and incentives should be provided to the sector. We are urging the government to delink GST from food. Currently, GST on food is linked to the room rent.

If the room rent is going above Rs 7,500; then food is charged at 18 per cent. We urge the government to reduce GST on food and delink it from room rents. Copy right issues are also affecting the customers.

That is why we are urging the government to provide a single window clearance for resolving the copy right issues. Also, we are urging the government to provide infrastructure status to hotel projects all over the country.

Lavish marriages and big corporate events are going outside India, causing revenue loss for the hospitality industry. What kind of measures should be taken to retain such large events with in India? The government is trying to promote big international events like concerts in India. What is your opinion about this matter?

Marriages and corporate events are going outside the country. In this way, the scope of creating jobs within the country is getting impacted. Now, every state is understanding the importance of arranging big events. They are trying to build separate facilities.

Our association is coordinating with various state governments on their tourism policies. We are working on representing a paper on having a National Tourism Policy for the growth of this sector.

In recent years, multiple reports have emerged about the friction between hotel & restaurant industry members and online travel platforms along with food tech intermediaries. Do you see any resolution going forward? Can you provide a perspective in this matter?

We are working on reducing the impact of intermediary on the sector. Though restaurant intermediaries have ensured speedy delivery to customers, the commission charged by them are in the upward of 20-30 per cent. It eats away the margin.

If such margin is taken away, then what is left with the industry. Though they have ensured speedy delivery, which has helped the industry; but high commission remains an area of concern. We are studying the situation and working on resolving this.

Similarly, there are concerns about the online aggregators in the hotel industry. If margin is taken away, no investor will be ready to invest in this industry. We are also planning to come up with alternate online platforms, if the need arises to protect the industry. You will hear from us on these new initiatives soon.

FHRAI is now engaging with FPOs (Farmers Producers’ Associations) for procuring fresh farm produce directly from farmers. Can you throw some light on this aspect?

FHRAI is going to conduct an event in which we will engage with FPOs for direct purchase of farmers’ produce. It will be beneficial for our farmers as they will get better price for their produce.

It will also solve the purpose of hotel and restaurant industry players because they will get fresh produce directly from farmers. Hotels and restaurants are the one of the biggest purchasers of farm produce in India.

Through this event, we will engage with FPOs for creating a framework under which hotels and restaurants can directly procure farm produce from farmers through FPOs.