Tourism Sector Urges VAT Reduction on Aviation Fuel Amid Declining Summer Travel
Tourism industry seeks lower VAT on ATF as summer travel slumps
Image: The Times Of India
The tourism industry in Rajasthan is facing a significant downturn, with hotel occupancies dropping to 35-40% this summer. Stakeholders are requesting a reduction in VAT on Aviation Turbine Fuel (ATF) from 25% to 7% to enhance air connectivity and support tourism recovery.
- 01Hotel occupancies in Rajasthan have fallen to 35-40%, a stark decline from previous years.
- 02Room rates have decreased by 20-25% due to reduced demand from both domestic and foreign travelers.
- 03Tourism stakeholders are advocating for a VAT reduction on ATF to stimulate air travel and tourism.
- 04Key destinations like Jaipur, Udaipur, and Jaisalmer could benefit from improved air connectivity.
- 05The tourism sector is crucial for Rajasthan's economy, contributing to employment and investment.
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The tourism industry in Rajasthan is experiencing a significant slump this summer, with hotel occupancies plummeting to just 35-40% compared to previous years. This downturn is attributed to soaring fuel prices, geopolitical unrest, and reduced corporate travel, leading to a 20-25% drop in room rates. Industry representatives have urged the state government to lower the VAT on Aviation Turbine Fuel (ATF) from 25% to 7%, similar to recent reductions in Maharashtra and Delhi, to make air travel more affordable and stimulate tourism growth. Ranvijay Singh Rathore, secretary of the Hotel Federation of Rajasthan, emphasized that enhanced air connectivity is vital for reviving tourism in key destinations like Jaipur, Udaipur, and Jaisalmer. The tourism sector, which has been a significant contributor to the state's economy, is facing challenges as leisure property occupancies have dropped to 25-30%, resulting in financial losses for many businesses. Stakeholders believe that reducing ATF VAT could help airlines expand their operations and ultimately support the recovery of the tourism industry.
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The decline in tourism is affecting hotel revenues and employment in Rajasthan, a state heavily reliant on tourism for economic stability.
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