PEST Analysis Of Athithidevobhava

PEST

‘AthithiDevoBhava’ which means Guest is like god is part a Sanskrit verse taken from the Taittriya Upanishad. The scripture is highly is revered by Indians and is imbibed from a very young age. This phrase has now become the tagline of the Tourism Ministry of India. The Indian Government has been proactive in promoting tourism in India through campaigns like ‘AthithiDevoBhava’ and ‘Incredible India’. India has 28 world heritage sites and 25 bio-geographic zones, which naturally attracts tourism, while rural and wildlife tourism are also picking up pace. A key component of the hospitality industry is Hotels. The success of the hotel industry depends a lot on location, luxuries, extra services provided and consumer perception. The happiness

of India has recognized that a chunk of its revenue comes from the hotel industry. The policies framed by the government favours the industry. A lot of emphasis is laid on promoting private-public partnership. It has also relaxed its laws on the approval of Visas, Tourist Visa on Arrival (T-VoA) scheme is extended to a few countries namely Singapore, Japan, Finland, and New Zealand etc. to encourage tourism. Policies further support the industry by giving tax holidays for up to 5 years to hotels rated 2, 3, 4-star located around UNESCO World Heritage sites. A policy framed in 2002 focuses on boosting infrastructure to support the expected growth in tourism, this policy aimed at creating world class infrastructure and better air and land connectivity. The Government might seem to be very supportive of the Hotel industry but it also levies a large amount of tax on the star and luxury category, therefore any political change or policy change can seriously affect the health the industry. According to the Consolidated FDI Policy, released by DIPP, ministry of Commerce and Industry, government of India, the government has allowed 100 per cent foreign investment under the automatic route in the hotel and tourism related industry. (1)The government has eased the laws and procedures regarding licensing to attract more players into the sector.This has seen an increase in the number of international brands that are entering the Indian market and increasing their

If the amount of rise in income is significant compared to the inflation it implies that there is more disposable income. As a result domestic expenditure on tourism has increased with changing lifestyles. The Hotel Industry was not affected much by the slump in the value of Indian currency as a large portion of its consumers are foreign travellers. The hotel business needs huge capital expenditure, large sums of money needs to be invested initially and it may be several years profits are realised. Add to this, the Govt. of India taxes luxury hotels heavily. (2)The section 10(5)(B) of Income Tax Act defines that concession should be offered to hotel industry on the income taxes paid by employer on salaries and wages of specified class of employees. The government also plans to rationalize the taxation scheme on hotels and guide it more towards a single tax structure which should reduce bureaucracy and procedural