Laying bare a bitter home(stay) truth: Loss of revenue 

It appears revenue from the homestay segment holding 10 per cent market share in the tourism industry will take a beating. Even though there are more than 3,000 homestays functioning

Published: 17th September 2017 01:09 PM  |   Last Updated: 17th September 2017 01:09 PM   |  A+A-

By Express News Service

KOCHI: It appears revenue from the homestay segment holding 10 per cent market share in the tourism industry will take a beating. Even though there are more than 3,000 homestays functioning in different parts of the state, only about 30 per cent are operating with the proper permit. Stakeholders claim unending norms are the prime reason behind homestay operators not coming forward to take permits. The authorisation is issued for a duration of three years. However, a majority of the homestays does not renew their registration.

According to officials of the Kerala Homestay and Tourism Society (HATS), currently, there are less than 900 homestays functioning with a proper license.  “Various norms and taxes keep homestays from seeking registration,” HATS director M P Sivadathan told Express. “In Kerala, homestays are considered as commercial activity even though the concept is to share a portion of the host’s residence with tourists. If the registration is taken, there should be a separate electricity meter with the commercial tariff and we have to have a separate water connection too.

Taxes have to be paid at the local self-governing bodies and registration from the Labour Department is required. Currently, an integrated system easing the registration norm and a combined tax system like GST are the need of the hour.”As per the government data, Kerala tourism earned a revenue of Rs 29,658. 56 crore in 2016. As homestays are popular among tourists coming from abroad as well as from other states, they have played a crucial role in revenue generation.

During the Homestays and Rural Tourism Travel Meet at Kochi, K V Thomas MP said issues faced by homestays especially regarding electricity and water commercial tariffs have been raised before the government. The concept of homestays was introduced for the first time in the country in Kerala in 2001 when Thomas was the Tourism Minister. “All the agencies concerned should conduct a meeting and a proper solution should be found. Homestays have been a boon to tourism and steps should be initiated to improvise it,” he said in the speech delivered at the meet on Friday. HATS is hopeful with Alphons Kannanthanam heading the Tourism Department at the Centre, favourable steps will be taken to promote homestays in the state. “We require an extra boost so the homestay industry can thrive further and more people can make use of it,” Sivadathan said.

Change in trend
Even though homestays are popular among foreign tourists arriving in Kerala to experience the tradition and culture, in recent years there has been a change in trend. According to Tourism Department officers, now domestic tourists - especially from north India, Bengaluru and Mumbai - are preferring homestays.

GST backfires on homestays
While GST promised sweeping reforms for homestays in Kerala, the new taxation seems to have started backfiring on small enterprises now. Even though the majority of the homestays was exempted from GST registration, now homestay operators are forced to go for GST registration to get proper business. The GST norms exempt homestays having an annual turnover of less than Rs 20 lakh from the registration. In Kerala, about 80 per cent of such units have a turnover of less than Rs 20 lakh. 

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