In an exclusive interview, S Venkat Reddy, president, Telangana State Hotels Association (TSHA) and B Jagdish Rao, secretary, TSHA discuss the issues challenging the hospitality industry and what needs to be done to make it competitive
What is the role of the Telangana State Hotels Association (TSHA) in promoting the hotel industry in the newly bifurcated State?
Reddy: TSHA is a proactive and an apex body representing the small and medium enterprises in Telangana State. It was established to address the grievances of the hotel industry with the governments, local bodies, government departments under one single platform. We have around 2000 members.
Is there any issue or challenge the industry is facing?
Reddy: Survival of hospitality industry is at stake. Governments have a big role to play. Hospitality industry is a generator of employment, parallel to the tourism sector. However, more governmental encouragement and incentives are needed for further development and growth of these sectors. India stands far behind in these sectors compared to other countries.
a) The unorganised sector is an unhealthy competitor. It is neither responsible nor accountable, pays no taxes, no fees, no licenses, no regulations, and provides unhygienic food and environment. FSSAI should have control over the unorganised sector. These players are causing erosion of sales turnovers of the well established, well organised, responsible and accountable industry.
b) OTAs, aggregators like OYO, food delivery apps are new unethical business concepts monopolising and robbing the owners with one sided agreements and the customers.
c) Multiple licenses – A single window licensing system should be considered for EODB (Ease of Doing Business).
What role can the state government play to resolve these issues?
Reddy: Central and the state governments should create regulatory bodies to oversee business ethics in the hospitality sector.
How has GST impacted the hotels and restaurants in Telangana?
Rao: We represented to the GST Council to raise tax exemption limit for rooms where the room tariff is Rs. 2000 and below for growth and development of tourism. But, exemption was given up to Rs. 1000 only. It is now essential to raise the exemption limit to Rs.2000 because of the OTAs and aggregators offering deep discounts and other charges being levied by them.
We also represented to reduce the five per cent GST to two per cent in standalone restaurants, air conditioned or otherwise, food parcel establishments and takeaways.
What is your association’s role in skill development in hospitality?
Rao: Our proposal has not taken off for want of funds.