The proposal to grant industrial status to the hotel sector has been approved by the Bengal Cabinet, an initiative aimed at boosting the tourism industry and addressing job issues ahead of the 2024 Lok Sabha elections. This move, which was made in response to a suggestion made by the State’s Tourism Department, might stimulate economic growth and revitalize the state’s tourism industry.

The salient features of this noteworthy advancement are as follows:

1. Significant Electricity Bill Savings: Hotels will reap the benefits of switching to industrial power tariff rates, which is expected to lead to a significant reduction in electricity costs. According to estimates, these savings could reach as much as Rs 3 per unit, which would be a huge relief for hotels—where energy expenditures are the second-biggest expense after staff salaries.
2. Lower power Duty: The hospitality business will benefit from a lower power duty after obtaining industry status, albeit it is yet unclear how much this will save in actual dollars. However, a sizable budgetary respite is anticipated.
3. Water delivery Cost Reduction: Hotels currently pay commercial rates for water delivery. This will alter, though, if the hospitality industry is given industry status and is qualified to pay the cheaper industrial rates for water delivery.
4. Lower License costs and Taxes: To further alleviate the financial strain on hotel operators, the hospitality sector will experience a decrease in license costs and other taxes, such as property taxes.
5. Better Floor-Area Ratio (FAR): As industry status increases, the FAR—the ratio of the amount of land that may be used for building to the usable floor area—will also increase. This implies that more building may be done on a given plot of land for hotels and other facilities related to tourism. More investors are expected to create hotels and related tourism facilities as a result of this development.

President of the Eastern Chapter of the Hotel and Restaurant Association of India, Sudesh Poddar, praised the ruling and emphasized the long-standing call for industrial status for the hospitality sector. He emphasized the opportunity to entice investors to support the state’s tourism industry and develop its current infrastructure.

Owing to the ongoing problem of a lack of jobs, particularly in light of the impending Lok Sabha elections, sources in Nabanna revealed that the government is looking into every possible way to generate jobs. With the state’s great tourism potential, new investments in the hospitality sector are expected to create major job opportunities.

Currently, the tourist sector makes up over 13 percent of Bengal’s GDP, which is more than the 7.5 percent average for the country. Notably, Bengal hosted 84.54 million domestic tourists in 2022 compared to around 1.04 million foreign visitors.

The decision to give the hotel sector industry status is anticipated to boost the state’s tourism economy, which employs over 15 lakh people. Furthermore, it has the potential to incentivize large hotel chains to broaden their lodging options, thereby augmenting Bengal’s tourism portfolio. The decision has the potential to stimulate the tourism sector, as noted by Samrat Sanyal, General Secretary of the Himalayan Hospitality & Tourism Development Network, an apex body representing stakeholders in the tourism industry.

Source- Travel biz