SHIMLA: The Himachal Pradesh tourism industry is facing a critical threat as a result of the recent tax imposed by the Sukhu government on tourist buses and tempo travelers. This development has sent shockwaves through the state's tourism stakeholders, who face cancellation in booking from three major states.
“One of the most significant concerns is the adverse impact on the influx of tourist groups from Gujarat, Bengal, and Maharashtra, regions that have traditionally played a pivotal role in bolstering hotel occupancy rates”, said Mohinder Seth, President, Shimla Hotel and Stakeholders Association.
“These groups often rely on tourist buses and tempo travelers to explore Himachal Pradesh. However, since the introduction of the tax on September 1st, tour operators find themselves in an untenable position, struggling to maintain profitability while organizing trips to Himachal”, hoteliers said.
The travel industry within these three states operates on thin profit margins, and the imposition of this new tax has further compounded their financial challenges.
In Gujarat, for instance, many travel agents had already boycotted Himachal as a destination due to previous issues.
The introduction of this tax has now led to the complete removal of Himachal packages from their offerings.
Similarly, travel agents and tour operators in Bengal and Maharashtra have also decided to refrain from bringing groups to Himachal.
The repercussions of this boycott and the subsequent cancellation of bookings have left not only hoteliers but also the government's revenue stream in dire straits.
The government stands to lose significant revenue, including GST and other indirect taxes. The hotel industry has been battling financial hardships for an extended period.
Initially, the COVID-19 pandemic wreaked havoc on the tourism sector, and now, heavy rains this year have effectively brought tourism to a standstill for nearly three months, the hoteliers pleaded.
Hopes for a revival during the forthcoming Durga Puja season have been dashed due to the ongoing cancellations and the boycott initiated by travel agents and tour operators from the three states.
The hotel industry continues to reel under exorbitant rates for utilities like water, fixed electricity demand charges, and tax burdens.
Moreover, the mushrooming growth of bed and breakfast establishments, homestays, and unregistered accommodations in and around Shimla has intensified competition, resulting in lower occupancy rates and reduced profitability for traditional hotels, they rued.
The recent boycott by travel agents and tour operators from Gujarat, Bengal, and Maharashtra has pushed the industry to the brink.
In response, industry representatives convened with the Principal Secretary of Tourism on September 4th, where they strongly urged the government to revoke the newly imposed tax on tourist buses and tempo travelers with immediate effect.
“This request represents a last-ditch effort to prevent the complete collapse of the tourism sector, which now stands at a precipice, but we have got no response so far”, hoteliers said.
