Industry Status To Tourism Cheers AP Inc

Once the policy is put in place, the investors will get a major fillip in the form of slew of incentives that are offered to those who make investments in various industries - S Prasanth, president, AP Hotels and Restaurant Association (APHRA), tells Bizz Buzz

Visakhapatnam: The decision of the Andhra Pradesh government to concede the demand from the hospitality sector to grant industry status to the tourism sector, has brought cheers among the stakeholders, raising the hopes for bright days ahead for them.

With India emerging as a super power in the tourism industry, the Government of India (GoI) has directed the States to formulate policies to encourage tourism as an industry. The National Tourism Policy as part of New India Vision expects high trajectory of growth and prosperity from the tourism sector so that it can provide employment opportunities and contribute immensely to the nation’s GDP.

According to the Travel and Tourism Development Index-2024 released by the World Economic Forum (WEF), India has achieved 39th rank among 119 countries, a significant jump from the 54th rank given in the report released in 2021. Revenue from tourism increased in AP to Rs161.35 crore in FY23 from Rs145.35 crore in FY22 and Rs76.09 crore in FY21.

In deference to the appeals from the tourism industry and organisations like CII, FICCI, FAPCCI, AP Chambers of Commerce, Chief Minister N Chandrababu Naidu on World Tourism Day announced to sanction industry status to the tourism sector. Sources in the government said the Government Order on granting the industry status will be issued in the next few days and the formulation of the policy will take a month or so as the guidelines have to be framed in detail.

“We are very happy with the decision as after a sustained campaign by the stakeholders in the sector, we could convince the State Government to take the path-breaking decision. Once the policy is put in place, the investors will get a major fillip in the form of slew of incentives that are offered to those who make investments in various industries,” S Prasanth, president, AP Hotels and Restaurant Association (APHRA), told Bizz Buzz.

Not only helping in getting funds through financial institutions easily, it will also give a big relief from shelling down huge amounts towards various taxes, he said. The power tariff, which the hotels are now paying at commercial rate at Rs11 per unit, will come down to Rs6 to Rs7 per unit. Hotels with 24x7 operations are major power consumers. Entire premises including swimming pool and other common amenity areas are treated as commercial areas for calculation for payment of taxes.

“Though our business area is confined to 20 per cent of the total area, the taxes are collected from the entire compound. Now, with the conferring of industry status, we will get a big relief,” he said.

Prasanth said the government has also promised to revise the bar licence fees for hotels, which was enhanced exorbitantly in the past. For setting up a three-star hotel, one has to spend Rs200 crore. AP has around 20 such hotels. Once the bar licence fee is reduced, the amount paid by them for the New Excise Year will be adjusted, he said.

The bold decision to grant industry status will give a shot in the arm for promoting MICE tourism and destination weddings and help stop flight of tourism opportunities from AP to neighbouring Odisha and Telangana, Tours and Travel Association of Andhra (TTAA) K Vijay Mohan said.

AP Tourism Forum secretary MV Pavan Kartheek said orders for allowing late night dining options, extended hours to serve the guests by the hotels and improved citizen-convenience will give a shot in the arm to much needed social infrastructure creating jobs and boosting the economy. Connectivity to Visakhapatnam, Vijayawada, Tirupati and other frequently travelled destinations will also improve with the introduction of more flights, he said.

AP Chambers of Commerce president Potluri Bhaskara Rao and secretary B Raja Sekhar hailed the decision of the Chief Minister and described the announcement to grant industry status to the tourism sector a momentous step that they have been advocating for over the past five years. This proactive measure is expected to stimulate growth and investment in tourism, which is vital for our State’s economy.