Besides, as is the case with the real estate sector, the hospitality sector too has been demanding ‘infra’ status for a long time. Any such grant would be welcomed.
“The hotel sector could potentially be given infrastructure status, which has been a long-standing demand from the industry,” said Nirmal Bang Institutional Equities.
ICICIdirect said, the infrastructure status would enable hotels to avail benefits of lower taxation, utility tariffs and simplified approval process for projects and also help attract further investments.
“Also, allowing one-year moratorium extension for loans availed under the Emergency Credit Line Guarantee Scheme (ECLGS) would ease current liquidity issues,” ICICIdirect said while suggesting EIH, TajGVK and Lemon Tree Hotels as likely beneficiaries.
Nomura India is expecting the ECLGS scheme for MSMEs may be extended by up to one year, especially for the hospitality, travel and tourism, leisure and sports and healthcare sectors.
The scheme is supposed to expire in March 2022.
Nirmal Bang said incentives could be offered to corporates for meetings and conferences conducted domestically. Meetings and conferences, which are conducted abroad, should not be considered as business expenditure, the brokerage said.
“This will discourage meetings, incentives, conferences, and exhibitions (MICE) events abroad and help in conserving foreign exchange while boosting sales of domestic hospitality businesses. Also, the government may allow corporate bookings and MICE to come under IGST, which could help companies avail GST input credit and encourage them to spend their annual budgets in India rather than opting for South East Asian destinations, the brokerage said.
Other key measures analysts are eyeing includes incentivisation of domestic travel through tax cuts or by way of tax deductions for a minimum 2-3 years, which can boost domestic travel until foreign travel resumes.
LTC cash voucher in lieu of LTC fare could also be given to central government employees to support domestic demand, analysts hoped, adding that extension of timeline from current 8 years to 12 years for setting off past business losses amid Covid-led disruption would be welcomed.
