Like you know, we just got back from our long trip of the year last week, and someone got to pay the bills after. So, we were going over the receipts, tallying them up with the credit card and so on to make sure everything was okay. Except it kind of burned me a little, or maybe much. And if you’re in India, it should burn you too.
You see, we were over at Dublin, and we figured we’d go all out and make a good weekend out of it. And we did, at the InterContinental Dublin, which is one of the finest luxury hotels in Dublin. We paid an all-in price of EUR 455 for the first night, and EUR 495 for the second night (comped due to the InterContinental Weekend Certificate, eventually!), but I noticed that the taxes were only 9%. Not bad.
In London, the VAT on everything is 20%. Including hotels. While we did not pay any VAT for our expensive city hotels, given they were a part of the free night redemptions, we paid some when we checked out of our 72 Pound Holiday Inn at the Heathrow Airport on the last night.
The last leg of the trip was over to Goa. We arrived at the Park Hyatt Goa, a hotel I’ve been coming to year after year since 2012. I was glossing over the bill, and the eye-popping 28% GST was staring me in the face. So for 3 nights booked at a discount on one of the Hyatt India sales of 35%, I was almost paying for one night extra this time around. The room rate per night was INR 7,800 and the GST for 3 nights was INR 6,552.
I almost cringed when I realised I’d dropped some neat cash to the revenue department, with their very large GST tab on this stay. And this was just the first month of GST coming into play. To add insult to the injury, the same hotel would charge us an 18% of total tax in the off-season for so many years before.
I feel dinged even more, when I compare this to the hotel taxes in Thailand at Grand Hyatt Erawan Bangkok which is only 10%.
Given the long weekend is here, and almost all the holiday destination hotels long weekends will have overpriced room rates hence everyone on a vacation over the next week should be prepared to pay the new GST on top of overpriced room rates.
I could take this to a different tangent talking about how as a honest taxpayer the government shouldn’t put their hand in my pocket and take out money, but I’ll limit this to the concept of luxury.
And before you say this is a #firstworldproblem, it isn’t. It totally beats me that INR 7500 is the bar for a luxury hotel. I would almost count all the 5 star hotels and chain hotels in metros in this league then. The price of a hotel room is set keeping many factors in mind, with the real estate on which it sits being one of the prime ones. Hence, a decent hotel in Connaught Place would always price more than one in Rohini, in Delhi, to quote an example.
I think this would be a serious deterrent to the high-rollers who want to come to India and stay at the fancy-pants places such as the Taj Falaknuma Palace and the Taj Lake Palace, Udaipur. And personally, I’d rather have one luxury high-spender over 3 people arriving in a charter from somewhere and sticking to a set itinerary and going away without buying the hotel extras.
After having paid 9% in a luxury hotel in western countries and 10% in neighbouring Thailand, it really makes me wonder whether the notion of getting top service quality at reasonable pricing at luxury in India will continue to prevail. I think we are punching above our weight with this narrow view on luxury.
What do you feel about the taxation on hotels? I hate it for sure as of this moment on.