Oravel Stays CEO calls for less stringent GST regime

Ritesh Agarwal, OYO's founder and CEO, says he is rooting for a less stringent Goods and Services Tax regime, especially on room tariffs ahead of the Budget. Financial Minister Nirmala Sitharaman will announce the Union Budget for 2023 -- 24 on February 1.

Agarwal told Business Today that levying 12 per cent GST on room tariff below 1,000 per night makes it hard for the common man to have an affordable stay while traveling for a vacation or business trip without a hole in his pockets.

The hospitality industry was not happy after the GST Council announced in July last year that hotels under 1,000 will come under the GST net. The exemption for rooms up to 1,000 was valid until the GST came into effect. OYO functions primarily in the budget hotels category.

Agarwal also pointed out that a higher GST regime affects the earnings of small hoteliers and reduces them considerably. He recommends completely do away with this tax especially on budget hotels, as it will benefit the travel and hospitality industry at large.

COVID 19 brought the industry to its knees. The industry was impacted by the pandemic-led lock down along with other restrictions. Revenues fell by more than half, according to estimates. Deep Kalra, co-founder and CEO of another travel tech company, MakeMyTrip, revealed in one of the interviews that the company's revenues fell by 95.5 per cent in the second quarter of 2020.

Agarwal said that the industry is still recovering from the impact of COVID 19 and that is why it needs support from the government. He urged the government to set up more homestays in the less-explored and offbeat destinations. This will increase Indian tourism and help in developing local economies.

OYO's parent company Oravel Stays revived its stock market plans last year. The company filed an addendum to its DRHP in September last year, which revealed its financials for FY 20, FY 21, and FY 22. The company has also announced its financial results for the current fiscal year, which saw revenues in H 1 of FY 23 grew 24 per cent to Rs 2,905 crore and losses of Rs 333 crore.