KOCHI: Though the Union budget is generally considered market-friendly, the proposal to hike service tax from 10 to 12 per cent has disappointed the tourism industry. Hoteliers and travel agents fear the proposal will adversely affect a state like Kerala where the tourist inflow is high. Eating out and hotel accommodation will become even more expensive. The proposal to raise service tax by 2 per cent is expected to make a huge impact on tourism sector. “It will have impact on cost of hospitality services and food served in restaurants,” said Jose Dominic, chief executive officer of the Casino Group of Hotels, at a panel discussion of the Confederation of Indian Industry (CII).T Damu, vice-president of Taj Hotels also shared the concern. There is already a fall in the number of tourists visiting Kerala. There is no doubt that the increased tax will have an impact on the cost of hospitality services. This, coupled with the proposed hike in airline fare, will take its toll the tourism industry in Kerala, Damu said.The proposal to hike airline fares will cut down the inflow of tourists, especially domestic tourists. People who used to travel in air-conditioned coaches of trains opted for flights only because of the competitive fares offered by the budget airlines. We should keep in mind that Kerala is competing with Maldives and Sri Lanka in the tourism sector. “It will not be surprising if the high price of airfare and hospitality service prompt travellers to explore alternate destinations,” said Paulose K Mathew, Travel Agents’ Federation of India (TAFI), Kerala Chapter chairman.
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