Budget hotels to get cheaper as government reduces GST
Hotel stays under ₹7,500 per night will get cheaper as the government drops GST to 5%.
This move mainly helps travelers in smaller cities and those looking for affordable or mid-range hotels.
Hotels expect boost in demand
With lower taxes, hotels expect more bookings—especially during busy seasons.
Rajiv Mehra from FAITH says demand could rise enough that overall tax collections might even go up despite the rate cut.
The hospitality industry hopes this will make local trips more attractive and close the price gap with international destinations.
Big chains upbeat, but mid-scale hotels face ITC challenge
Big chains like Radisson and IHG are upbeat about more people choosing quality stays outside metro cities.
But there's a catch: budget and mid-scale hotels lose out on Input Tax Credit (ITC), which could squeeze their profits and slow down upgrades or new investments.
The sector will need to balance these challenges while welcoming an expected surge in domestic guests.