Major hoteliers have formed a new body, Hotel Association of India (HAI), to focus on the ills afflicting the industry and take up its cause with the government. Restauranteurs, however, have been left out of the association.
The move is being seen as a fall-out of dissatisfaction over the Federation of Hotel and Restaurants Associations of Indias (FHRAIs) efforts to effectively take up the hotel industrys cause.
The association has been formed just before the United Front (UF) governments presentation of the Union Budget. This is significant as the hotel industry has been asking for various reliefs.
Among the problems being faced by the industry are, a 10-per cent expenditure tax on hotels, reintroduction of Section 80-1A of the Income-Tax Act, which is likely to result in increased number of rooms available for tourists, and stringent land laws making it difficult to get land for developing property in the country.