GST impacts peak tourist season

Notwithstanding the long Dasara break, the hospitality and restaurant sector in the city seem to be staring at one of the dullest seasons this year with many reporting a drop in business by over 20%.The festive season which begins with Dasara and moves on to Diwali is known to draw hordes of tourists from West Bengal who arrive in the Port City for their annual vacation. This year, however, restaurants, mid-segment hotels and guest houses have witnessed a steep fall in bookings as compared to the year before. Industry players attribute it to the impact of GST, which has resulted in an overall increase in the cost of tour packages.

Vihar restaurant located in Rushikonda reported a drop of 15% business this season. “We had at least five families who walked out of the restaurant in the peak Dasara week after enquiring if we had moved to the GST regime.Except for the last three days of the festival, the business has been dull. This is very unlike the peak festive season rush we see in Vizag,” said Seshagiri Mantri of Vihar Hospitality. Air-conditioned restaurants like Vihar fall under the 18 % GST slab.

It is a similar story at the guest houses and service apartments that have mushroomed in the city and seen as an affordable option of stay for the budget travellers that comprise the majority of inbound tourists to the region.“Our business is impacted by 30 % this tourist season as against the Dasara period last year. Till last year, we used to be sold out during the entire Dasara – Diwali period. This season, 20 % of our inventory is vacant post October 1. We don’t know how Diwali week will be. The advance bookings don’t look that encouraging,” said V. Suresh Kutti of Beach View Holiday Home.

Tour bookings have dropped from 15 days package seen in the previous tourist season to eight days with travellers curtailing their stay duration owing to rise in overall cost.According to Vijay Mohan of Holiday World and, Dasara coming in early this year and train travel tickets for the season opening up post summer break are other possible factors. “We are hopeful of the December – January season for which we are seeing bookings coming in,” he added.


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