Union Budget 2017 to make travel easier and cheaper: Travel portals
The industry, which was endorsed by Finance Minister Arun Jaitley as a sector of economic importance, has welcomed the proposed decisions, saying that the steps will make travel more accessible and reduce friction between the user and service provider.
The push for digital payment platforms and removal of service tax on IRCTC bookings online in the latest Union Budget have enthused the travel industry, who believe the initiatives will make travel easier and cheaper across the country.
The industry, which was endorsed by Finance Minister Arun Jaitley as a sector of economic importance, has welcomed the proposed decisions, saying that the steps will make travel more "accessible and reduce friction between the user and service provider".
According to online travel portal Skycanner, that recently took on board a direct booking application, the travel industry has already seen a hike in the number of transactions made via smart phones over the past one year, and the trend is only going to catch up with the recommendations under the budget.
"We recently added low cost carrier 'Scoot' to make booking and payments online and on app seamless and easy.
Similarly, with a 30 per cent jump in searches witnessed between January 2016 and 2017 through smart phones, we know that there is an impetus in online transactions.
"Online travel companies are embracing this development with the singular aim to make travel easy and simple," says Reshmi Roy, Growth Manager, Skyscanner India.
The Budget noted that "a mission" would be set up with a "target of 2,500 crore digital transactions" for the upcoming fiscal year, besides strengthening the digital payment infrastructure and grievance handling system.
Sharat Dhall of Yatra.com said that the newer policies to promote the digital economy would contribute immensely towards developing a "truly cashless India" with citizens having an easy access to a wide choice of options at their convenience.
He also appreciated the announcement to waive off service tax on train tickets booked via IRCTC website, saying it was another indicator of the government's agenda of promoting digital transactions, particularly in the aftermath of demonetisation.
"The move will further encourage cashless transactions in the wake of the demonetisation exercise," says Dhall.
Noting that technology is one of the major elements driving the tourism industry, Arvind Bhatia from Indian Routes, a travel agency, feels the move will not only make travel cheaper for the public, but also benefit agencies.
"We welcome this move by the present government. It will overall encourage people to use the online platform more.
IRCTC itself is a very helpful tool and making it slightly cheaper for the public makes our lives easier.
"From the tourism point of view we consider it a great move as going forward we see technology playing a great part today and paving our way for the upcoming future. It will allow agents like us to make use of this platform more and also enable offer competitive rates for the overall package for group tours," says Bhatia.
Aloke Bajpai, who has co-founded ixigo.com, says that the budget has laid out some "big investments" for the industry, both in terms of infrastructure and technology.
"Kicking off on a good note, this year's budget brought happiness to many with the removal of service charges on bookings made through IRCTC - indicating the government's focus to drive more digital transactions," he says.
He also lauded some of the announcements in the Railway budget like 'Raksha coach', 'clean my coach services', 'coach mitra' facility for registering complaints and installation of bio-toilets, which he feels would "attract back travellers by improving cleanliness, safety and passenger comfort".
Another important development was the introduction of the special tourism zones anchored on SPV (Special purpose vehicle) that will be established in partnership with the state governments.
"The move will lead to creation of new tourist hubs and catalyse both domestic and inbound tourism. The sharp focus on building improved connectivity, particularly investment in road, railways and airport infrastructure across the length and breadth of the country, is a welcome move for the travel and tourism sector.
"This will increase the number of destinations on the tourist map by reducing the travel time to these smaller cities and towns," says Dhall.
However, Kapil Goswamy of BigBreaks.com feels disappointed with the industry's concerns about high tax rates being "ignored" by the government, and feels that waiving off service tax on IRCTC online bookings would "not help the industry directly".
"Even if you consider the indirect benefit, the saving that travelers will make the withdrawal of service tax on online train bookings is too small (minimum Rs 46 and maximum Rs 138) to encourage travel and tourism and make a difference to the fortunes of the travel industry.
"Of course, we will be passing the benefit to our customers, but it is too miniscule and inconsequential for us," says Goswamy.