HRAWI raises concerns over governments plan to open homestays, says it does not have assurance of guest safety and could have consequences which would affect employment and even tax revenues.

THE HOTEL and Restaurant Association of
Western India (HRAWI) has raised concerns over the Government’s plan to open up
homestays as a way to bridge the acute deficiency of hotel rooms in the country
for promoting tourism. The proposal which may allow anyone to offer stays at
their homes will have no Government intervention and not attract any kind of
taxation or commercial tariffs. The hotel industry is skeptical about the outcome
of such a plan as it could backfire with no assurance of guest safety and would
have consequences that affect employment and tax revenues.

“In a country like India where tourism is
at a nascent stage promotion of homestays at the expense of organized
hospitality could spell doom. The primary problem with homestays is that there
are no standardizations or categorizations. There have been multiple cases of exaggerated
promises, misrepresentations, disagreements and conflicts with guests, hygiene
issues and intimidations among others. Because homestays are unregulated, there
are no redressal systems in place,” said Bharat Malkani, President, HRAWI (see photo).

“Hotels are required by law to send details
of foreign guests to the police station by submission of a C Form. This is a
security requirement from the Ministry of Home Affairs. Homestays are not
required to be compliant and the industry fears that this will become the de
facto accommodation for those foreigners that seek anonymity from the Police,”
he added.

HRAWI also questioned the relevance of
subjecting hotels to administrative clearances, liquor permits and other
licenses while home stays providing the very same services are exempted.
Homestays, functioning just like hotels do, are prevalent even today in a lot
of states. However, they are unorganized and are presently limited in numbers.
With the Government’s new shift in policy focusing on homestays, the dynamics
are expected to change.

“The hospitality industry without homestays
in Maharashtra today can generate almost Rs. 600 crores per extra night that a
foreign tourist stays back to the Government as foreign exchange earnings,
besides being the highest employment generator. Almost all tourist towns across
the world have grown on the back of strong hospitality infrastructure and not homestays,
which are brought in only as a stop gap emergency measure, as Delhi did during the
Asian games, due to the three year gestation period to add new hotel rooms. The
solution to growth of tourism in India is freeing the hospitality sector from
red tapism and following a pragmatic taxation policy,” said Kamlesh Barot, Past
President, HRAWI.

“If the homestays concept does go into
execution then hotels that are presently operating with the highest taxation
applicable in addition to paying for utilities such as water and electricity at
commercial rates are bound to be doomed. Tourism cannot afford to run or prosper
without hotels and the Government will have to consider an alternate plan that
can either allow hotels to operate with the same relaxations as would be given
to homestays or vice versa,” concluded Malkani.