FHRAI Expects Reforms from Budget 2025-26 to Boost Hospitality and Tourism Sector
FHRAI Expects Reforms from Budget 2025-26 to Boost Hospitality and Tourism Sector

The Federation of Hotel & Restaurant Associations of India (FHRAI), the third-biggest hospitality organization in the world, has said what it hopes to achieve from the Union Budget for 2025–2026. In order to solve the serious issues facing the hospitality and tourism industry, FHRAI strongly advises the government to enact reforms. These reforms, according to FHRAI, will boost investment, generate jobs, and promote general economic growth in the sector, which plays a significant role in India's economy.

The FHRAI's main recommendation is to give hotel and convention center projects with beginning prices of ₹10 crore infrastructure statuses. Smaller projects that dominate the Indian market are unable to meet the current infrastructure status requirements, which require convention centers to cost ₹300 crore and hotel developments to exceed ₹200 crore. Furthermore, a major obstacle to the growth of tourism in India is the extra requirement that cities have a population of one million or more in order to be eligible.

According to the 2011 Census, just 53 Indian cities meet the one-million-population threshold, which FHRAI claims leaves out the great bulk of the nation's cities. Despite their enormous tourism potential, historically significant and up-and-coming tourist attractions are unable to profit from infrastructure because of this constraint. The population of many communities with pilgrimage destinations, heritage sites, or natural attractions is far below this cutoff. Because of this, projects in these locations find it difficult to obtain finance on reasonable conditions, which restricts their expansion and, in turn, the growth of tourism in these areas.

K Syama Raju, President of FHRAI, said, “The hospitality and tourism sector is crucial to India’s economic growth. It provides employment opportunities and generates substantial foreign exchange earnings. However, the sector is currently facing multiple challenges due to restrictive policies and regulations. By granting infrastructure status to smaller projects, streamlining the licensing process, and addressing GST issues, we can help unlock the full potential of this sector. These reforms will create a more competitive and sustainable environment for businesses, which will, in turn, help India position itself as a global leader in tourism. This is an opportunity for the government to align policies with the growing demands of the tourism industry and ensure that India remains a top destination for both domestic and international visitors.”

The federation demands that the GST rates on hospitality services be rationalized in addition to infrastructure status and the streamlining of licensing procedures. India is less competitive than its neighbors because of the existing GST system, which is among the highest in the world. The FHRAI suggests reorganizing the GST rates for banquets, events, and restaurants as well as severing the connection between the GST on restaurants and hotel room rates. In order to enable companies to claim input tax credits for services obtained from other states, the group further calls on the government to review the "place of supply" regulations under the GST. As a result, operating expenses would go down and Indian tourism would become more competitive overall.

The current complicated and expensive excise and liquor licensing regulations need to be changed. The group recommends a streamlined procedure with small costs, akin to the FSSAI registration system, to enable businesses comply and help satisfy the rising demand for leisure and entertainment services. According to the federation, these suggested reforms will be crucial to achieving India's goal of having a $1 trillion tourist business by 2047. By taking care of these problems, India can improve its standing as popular travel destination worldwide, adding jobs, boosting foreign exchange profits, and boosting the country's economy as a whole.


 

 
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Associating drunk driving with hotels unfair: HRAWI
Associating drunk driving with hotels unfair: HRAWI
 

Hotel and Restaurant Association of Western India (HRAWI), the apex body of restaurateurs and hoteliers of Western India, has initiated a social media campaign against the recent liquor ban.

HRAWI will run a series of hashtags on Facebook that will try and explain some of the common misconceptions. The hashtags include Penalize Drunk Driving Not People, Save Night Life Save Tourism, and Save Hotels Save Jobs among others.

Dilip Datwani, President, HRAWI, said, “Through the social media we will convey a few facts that, in normal times, would have been apparent. In the current state, unfortunately, facts are obscured by surround sound. The facts to be considered are alcoholism is a disease and a social evil; drunken driving is a crime; and, hotels and restaurants serve alcohol. What is of significance is that these facts are not correlated. Any arrow of continuity that may exist is forced. The compulsive alcoholic will find ways and means for consuming alcohol and he will continue to drive after drinking. Just as locking up girls at home is not a solution for preventing rapes, banning hotels from serving liquor cannot be a solution for ending the menace of drunk driving. Drunk driving is a crime, and it should be treated as one.”

Datwani added, “One million jobs, Rs. 200,000 crores loss to the exchequer, possible closure of 15,000 establishments is not a small thing. It is a huge social cost to pay. And we would not have minded being sacrificed if the ban were to yield any results. But reality is that all the job losses and other damages would be wasted. Statistics prove that there is a correlation between drunk driving and enforcement; and not between drunk driving and number of restaurants and bars. If true, there would be no drunk driving cases in Bihar or Gujarat where we have total prohibition.”

Kamlesh Barot, Former President, Federation of Hotel and Restaurant Associations of India (FHRAI), said, “Most of the affected hotels cater to city residents and not interstate drivers. We are legal licensed establishments that contribute to the nation’s GDP and have played a pivotal role in the growth of the nation’s tourism. With a single stroke the industry has been crippled. HRAWI has always promoted responsible drinking.” 

 

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?FHRAI considers filing review petition on SC's liquor ban order
?FHRAI considers filing review petition on SC's liquor ban order
 

The Federation of Hotel and Restaurant Association of India (FHRAI) is considering to file a review petition on Supreme Court's order of banning sale of liquor within 500 metres of highways across the country from March 31.

Pradeep Shetty, member of FHRAI's legal committee, said, "We are considering filing a review petition on the matter. We believe we can have a better hearing now. Previously, we didn't get enough time for the hearing and we feel we were caught in the crossfire of liquor associations."

Members of western states such as Maharashtra, Goa, Gujarat, Chhattisgarh and Madhya Pradesh, and union territory of Daman and Diu met to take stock of the matter.

Diu saw a bandh on Monday, with 7,000 people participating in the protest. In Diu, 100 bar licensee holders have been affected due to the ban and the confusion because of a district road which got notified as a highway in 2014.

Yatin Fugro, representative of the local Diu Hotels Association, said, "We were told a major district road got notified as a highway in 2014 and no one was aware of this including our district magistrate. The fight is against the national highway and not just the liquor ban in Diu."

Riyaaz Amlani, president of the National Restaurant Association of India, said states such as Delhi and Haryana have started the process of measuring the distance between highways and hotels.

Manbir Chaudhary, President, Hotels and Restaurant Association of Haryana, said, "We met the Haryana government officials yesterday and they have agreed to consider the motorable distance for measuring the distance between highways and hotels. The process is on. There are 194 bar licensees across Haryana in 22 districts."

Industry experts said the measurement procedure, which will be state specific, can lead to a series of litigation disputes in high courts.

Shetty said, "I can foresee about 50-100 new litigation disputes in high courts as a result of this measurement parameters, which could be different in each state. Parameters could vary depending on how the distance will be measured and from where."

Aashish Gupta, EO of the Federa consultant CEO of the Federation of Associations in Indian Tourism & Hospitality, said the process of measuring the distance is on in certain states and the federation has requested that motorable distance be taken into account. Industry associations are meeting various state officials, he said.

 

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HRAWI requests single window for deadline extension
HRAWI requests single window for deadline extension
 

The Hotel and Restaurant Association of Western India (HRAWI) has requested for a single window system for approval of deadline extensions.

While the association has welcomed the state government's decision to allow hotels and restaurants to operate till 5am on December 24, 25 and 31, it has expressed apprehension about being able to host Christmas Eve programmes as the necessary approvals are yet to be granted by the police.

"Without all the approvals in place we cannot conceive special programmes for our patrons. This not only affects the city from a business point of view in terms of revenues lost, both to exchequer and the establishments, but also restricts revellers from enjoying the spirit of the season to the fullest," said Bharat Malkani, President, HRAWI and Federation of Hotel and Restaurant Associations of India (FHRAI) in a press statement.

The HRAWI has appealed for blanket approvals on extension of timings on these days by default, as against ad hoc approvals given each year. It also has requested the government to provide such approvals through a single window rather than multiple departments like police, excise, etc.

"Each year hotels face the dilemma of whether or not to proceed with making any special arrangements as we are unsure if all the permissions will come through in time. Even if the permissions do come through, it does no good for us to receive it at the eleventh hour because then we have very little time to make the required arrangements," Malkani said in the statement.

Early this year, Maharashtra chief minister Devendra Fadnavis had proposed certain measures to promote tourism and create ease of doing business for the hotel industry in the state. Based on the proposals submitted by HRAWI, the government in principle resolved to reduce the number of operating licenses from 75 to 25.

 

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SC seeks Centres view on restaurants charging more than MRP
SC seeks Centres view on restaurants charging more than MRP
 

A bench headed by Justice Dipak Misra issued notice to the Department of Consumer Affairs, Controller of Weights and Measures, and others on an appeal filed by the FHRAI seeking to setting aside of the division bench of the Delhi High Court’s February order.

The HC bench while disposing of the appeals filed by the government had kept the question of law, which was decided by its single judge, open for adjudication in any fresh proceedings under the new law. It had also held that the single judge’s March 2007 order “shall not be a precedent” in any case even if the concerned provisions of the old (repealed law) and the new law were identical, reported FE.

The HC bench’s order had nullified the binding effect of Justice Vikramjit Sen’s 2007 order that ruled that hotels and restaurants in the Capital can sell bottled mineral water over and above the MRP to customers who visit them and enjoy their other services facilities.

Sen had observed that “the customer does not enter a hotel or a restaurant to make a simple purchase of the bottled water. It may well be that a client will order nothing beyond a bottle of water or a beverage, but his direct purpose in doing so would clearly be to enjoy the ambience available therein and to ordering of any article for consumption.”

Justice Vikramjit Sen’s 2007 order ruled that Delhi’s hotels and restaurants can sell bottled mineral water over and above the MRP.

The FHRAI told the apex court that the HC bench’s decision had “grossly undermined the sanctity and integrity of the judicial/adjudicatory process”. It said that irreparable harm and injury will be caused to its members if the Centre is permitted to commence proceedings under the Legal Metrology Act 2009 without allowing its members to rely on 2007 judgement.

Senior counsel Harish Salve argued that charging prices for mineral water in excess of MRP during the service does neither violate the provisions of the Standards of Weights and Measures Act/the Packaged Commodities Rules nor the new law. “There is an element of service, so MRP can’t apply,” he said.

 

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TRAI dismiss higher cable TV fee for restaurants, hotels
TRAI dismiss higher cable TV fee for restaurants, hotels
 

The Telecom Regulatory Authority of India (TRAI) has ruled that cable TV charges for hotels and restaurants should be on a par with domestic charges.

The channels and broadcasters had been demanding commercial rates; however the authority has asked to pay the regular charges (except for special or ticketed events like a football or cricket world cup where the public is charged separately), reported TOI.

“The telecom regulator’s order has liberated cable TV from monopoly. It has been declared a necessity for the benefit of people and not a luxury,” said Bharat Malkani, President, HRAWI.

However, FHRAI submitted that in 2006, the Supreme Court had held that television is a mere amenity in hotel rooms just like fans and air-conditioners.

The FHRAI also stated that channels do not subsidize ordinary subscribers like it happens in electricity or water to demand higher tariff for commercial subscribers.

“Tourism departments have mandated that TV has to be there as it is a necessity and not a luxury like it used to be a decade ago,” said Pradip Shetty, FHRAI’s legal adviser.

 

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