Highlighting the unfair advantages enjoyed by unregulated players and aggregators from the unorganized sector like Airbnb, Bed & Breakfast and Homestays, the Hotel and Restaurant Association of Western India (HRAWI) has announced that it will petition the Governments of its western region, to create a level playing field and bring uniformity in regulations for all hospitality players in the market.
It has pointed out that while five star hotels pay a substantial amount 38 per cent of the room revenue as direct and indirect taxes, some of the lavish bungalows listed in sites of these illicit hotel aggregators do not pay a single rupee as taxes. Further, over 42 licenses are needed to start and operate an organized sector hotel, while the unregulated sector operates without undergoing any such process.
Dilip Datwani, President, HRAWI, said, "We welcome competition in any and every form, but this kind of disparity is unhealthy for the industry. It is almost as if we are doing our businesses with our hands tied. Disruptions are healthy, as it allows customers to enjoy best services at the cheapest rates. But the disruptors cannot be allowed to disrupt and proliferate simply on the basis of avoiding regulations and taxes. Today a hotel, let's say charges Rs. 1500/- for a room, then it has to pay 10 percent as luxury tax beside other taxes, but a bungalow listed in Airbnb, for over Rs. 10,000/- a day, ends up paying nothing. If nothing else, this is a loss of revenue to the exchequer also."
Sanjay Sethi, CEO & Managing Director, Chalet Hotels Pvt Ltd (Chalet Hotels owns several Marriott properties in India), said, "Clearly the big ticket concerns are the security issues and the loss of revenue to the exchequer. HRAWI recently compiled a document on how other major cities in the world have dealt with this issue. Some of the findings were revealing. After licenses were made mandatory in Germany, forty percent of Berlin’s Airbnb listings disappeared. Amsterdam, meanwhile, banned apartments rented out for more than 60 days per year, or to more than four people at a time. It has also allocated USD1.1 million to identify apartments that are being offered for short term rentals or don't have landlords living in them. Barcelona has slapped Airbnb and Homestay USD65, 000 each for listing apartment without permit."
Datwani added, "In a country like India where tourism is at a nascent stage the unorganized, illicit accommodation could spell doom. The primary problem is that there are no standardisations or categorisations. There have been multiple cases of exaggerated promises, misrepresentations, disagreements and conflicts with guests, hygiene issues and intimidations among others. Because the stays are unregulated, there are no redressal systems in place. Hotels are required by law to send details of foreign guests to the police station by submission of a C Form. This is a security requirement from the Ministry of Home Affairs. Homestays are not required to be compliant and the industry fears that this will become the de facto accommodation for those foreigners that seek anonymity from the Police."
HRAWI also questioned the relevance of subjecting hotels to administrative clearances, liquor permits and other licenses while these unorganized accommodations, providing the very same services are exempted. Homestays, functioning just like hotels do, are prevalent even today in a lot of States of India.
Kamlesh Barot, Past President, Federation of Hotel and Restaurant Association of India (FHRAI), said, "The hospitality industry without these illicit accommodations in Maharashtra, can generate almost Rs.600 crores per extra night that a foreign tourist stays back, to the Government as foreign exchange earnings, besides being the highest employment generator. Almost all tourist towns across the world have grown on the back of strong hospitality infrastructure and not unregulated homestays. The Government will have to consider, either allowing hotels to operate with the same relaxations as would be given to these aggregators and such unregulated homestays as they are not treated equally, there can't be a first among equals."
The St. Regis Mumbai appoints veteran hotelier, Nicholas Dumbell as the General Manager. Started his career in London with leading International hospitality chains, he became a part of Marriott International’s myriad brands spanning the last two decades.
Dumbell, has a proven track record of implementing terrific strategic initiatives delivering financial success in tandem with customer satisfaction. He came back to his Asian roots in 2014 to lead the Marriott Hotel, Bengaluru and then subsequently moved to Mumbai in 2016. This will be his third role in India, with him most recently leading the team at The Renaissance and Marriott Executive Apartments, Mumbai, where he grew both the hotels revenue and customer service scores to record high’s. During his tenure he played a critical role in establishing the hotel as a leading conference and wedding venue in Mumbai and was active in the redevelopment plans to up-grade the properties and create additional Conference facilities and a luxury Hotel with-in the complex.
Having a Bachelor’s Degree in Science from the prestigious Cornell University School of Hotel Administration, USA and has a management degree from prestigious Ecole Hoteliere, Lausanne, Switzerland. His role as General Manager over the last few years has given impetus to his growth and appointment into the luxury market. His pushes for employee engagement, implementing standards, drive guest voice scores, building relationships with key stakeholders and grow hotel market share at award winning levels.
At The St. Regis Mumbai, Dumbell will lead the dynamic luxury team to sustain the hotel’s positioning as one of the most awarded hotels and as the preffered destination for the social elite. He will focus on steering the team to drive revenue and maintain the property’s reputation of having the highest turnover in South Asia while ensuring guest voice scores remain a priority for the The St. Regis Mumbai.
Nicholas' wife Alison is an American former award winning London Sommelier. His competitive spirit has always drawn him to sport and he can often be found on the rugby or football pitch coaching Toby and George his two teenage boys.
Hotel and Restaurant Association of Western India (HRAWI) has welcomed the Government’s proposal to reduce the GST rate from 18 per cent to 12 per cent, making it uniform for both the air-conditioned (AC) and non AC restaurants. The Association has also appealed to the Govt. to continue providing the Input Tax Credit (ITC) to hotels and restaurants which will help them maintain the prices for the food and beverages on the menu. HRAWI has stated that despite the cost of operations having actually gone up, hotels and restaurants are maintaining old prices on the menu in fear of losing customers.
Dilip Datwani, President, HRAWI said “The move to bring down the GST rate for AC restaurants will definitely encourage the customer to eat out again. We welcome the proposal and thank the Government for considering our appeal. Presently all industries, and not just hotels and restaurants are trying to grapple with GST and the transitionary phase has been a very difficult phase for us. Continuing to provide ITC will help businesses to counter the rising prices on raw material and other utility costs. As of now, none of our vendors have reduced prices or passed on benefits of ITC to us. Additionally, post introduction of GST the costs of operations and raw materials have actually gone up. However many hotels and restaurants have continued offering F&B at the old prices but with the reduction in the GST rate, we will now be able to remain competitive”.
Dilip Datwani also said “As major expenses like electricity, rent, salaries, vegetables, poultry, seafood are exempt from GST, the input credit advantage for restaurants is negligible. So, it is our humble request to the Government that they consider revising the GST rate for restaurants that are part of hotels to 12 per cent in line with other stand-alone restaurants”.
Hotel industry has also appealed that the GST rate on in-house restaurant bills be levied at 12 per cent like it would be for all other stand-alone restaurants.
Hotel and Restaurant Association Of Western India (HRAWI) has organised a seminar on 'GST Law – 2017' on 13th July 2017 at the Trident, Nariman Point in Mumbai. The seminar will provide an opportunity to hoteliers and restaurateurs to resolve their GST related queries.The seminar will be open to both its members and non-members, will be addresses by eminent experts who will clarify any doubts regarding the new tax regime.
Dilip Datwani, President, HRAWI, "The GST is a big change to the taxation system for our country and to get familiarized with any change takes time. Over the last one week the association has been trying to identify the most common issues and queries posed by hoteliers and restaurateurs and also by customers."
He added, "Through this seminar we intend to put to rest any ambiguities and address any grey areas with respect to GST. We have brought on board the best minds and experts on matters of taxation and who would be happy to help us bridge any gaps in our understanding of the GST. We are positive that participating hotels and restaurants will greatly benefit from this seminar."
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