SIHRA asks for lower luxury tax

The South India Hotels & Restaurants Association (SIHRA) Saturday appealed to the governments of four southern states to reduces taxes as the industry has been hit by the worldwide economic slowdown.

After its executive committee meeting held here, Saturday, K. Syama Raju, SIHRA president, said the Kerala government has responded favourably by reducing the luxury tax in the state by five per cent for a three month period, during the lean season.

"Considering the current situation it is proposed to appeal to the Government of Kerala to extend this for the next nine months," said Raju.

According to SIHRA, the hospitality industry underwent a slowdown in growth nationally in the year 2012-13. It was found out that while there was a growth of 11 per cent in hotel room supply with demand growing at 9.2 per cent, the average rates declined by 3.6 per cent as compared with those of the previous year.

The recession with occupancy being lower compared to the previous year has put pressure on the financial positions of hotels who are already suffering an unequal pricing.

They also pointed out that the Kerala Government has introduced a liquor policy that envisages new bar licenses being restricted to only 4 Star and upward hotels from April 2012 onwards and from April 2013 onwards this is being restricted to only 5 Star Hotels.

"These new regulations severely hurt the growth of the hotel industry and consequently tourism in the State. New Hotels in the 1-3 Star category that have been already been built find it difficult to secure bar Licenses and this will ultimately discourage budget foreign tourists in particular ,who normally stay at such hotels," added Raju.

SIHRA is asking for an extension of subsidies for hotels setting up solar plants for power generation and that bars should be permitted to function on the 1st day of the month and the timings be increased at least in notified tourist destinations.

SIHRA's membership comprises the smallest restaurants to five star deluxe Hotels in the Southern States of Andhra Pradesh, Karnataka, Kerala, and Tamil Nadu and the Union Territory of Puducherry.

Currently the association has around 1100 members.