Processing .....please wait.. 
The article has been forwarded.... 
Bangalore's hotels seek bailout
By siliconindia
|
Tuesday, 09 December 2008, 22:52 IST |
9 Comments
Bangalore: Bangalore's hospitality sector, along with the Federation of Hotel and Restaurant Associations of India (FHRAI) is seeking an immediate bailout package from the state government. The business in this sector is suffering after the Mumbai terror attacks.
There has been a vast reduction in luxury tax slabs with hotel occupancy levels dropping to 20 percent and room rates falling by 50 percent in just ten days. The industry has also requested that the luxury tax on rooms be charged on the actual rates and not on the printed rack rates, reported The Times of India.
Usually, hotels charge the luxury tax on actual room rates, which are often 30-35 percent, lower than the rack rates. But now the Karnataka state government has changed it to rack rates in this year's budget due to which the guests are paying 20-25 percent higher room rates.
In Bangalore, foreign travelers checking into luxury hotels have fallen by 45 percent post 26/11 attacks. This spells big trouble, as 85-95 percent of the total room occupancy of star hotels in the city comprise of foreigners.
Thus the requests being made were-luxury tax should be reduced from the current 12 percent to eight percent depending upon the room type, from eight percent to six percent and exempt tax on rooms priced at Rs 400 and below. The industry also wants luxury tax on banquet facilities to be brought back to the earlier level of 12.35 percent, from 20 percent. The government had increased the tax slabs on banquet facilities in this year's budget.