Budget 2023: OYO CEO Ritesh Agarwal seeks 'less stringent GST regime for hospitality sector'

OYO’s founder and CEO, Ritesh Agarwal is rooting for a less stringent Goods and Services Tax (GST) regime, especially on room tariffs ahead of the Budget. The Union Budget for 2023-24 will be announced on February 1 by Finance Minister Nirmala Sitharaman. 

“Levying 12 per cent GST on room tariff below Rs 1,000 per night makes it difficult for the common man to have an affordable stay while traveling for a vacation or for business, without burning a hole in his pockets,” Agarwal told Business Today.

The hospitality industry was not too happy after the GST Council announced in July last year that hotels under Rs 1,000 will come under the GST net. Until then, GST exemption was valid for rooms costing upto Rs 1,000. OYO, notably, functions primarily in the budget hotels category.

Agarwal also highlighted that a higher GST regime impacts the earnings of small hoteliers as well and reduces them considerably. His recommendation is to completely do away with this tax especially on budget hotels as it will benefit the travel and hospitality industry at large.

COVID-19 brought this industry to its knees. The pandemic-led lockdown along with other restrictions put a complete halt on travel which impacted the industry gravely. Revenues started plummeting by more than half, according to some estimates. In fact, 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 echoed this point and said that the industry “is still recovering from the impact of COVID-19” and that is why it “requires support from the government.”

One of the things he urged the government to do was to set up more homestays in the less-explored and offbeat destinations. This will enhance Indian tourism as well as help in developing local economies. 

OYO’s parent company Oravel Stays revived its stock market plans last year. In September last year, the company filed an addendum to its DRHP which revealed its financials for FY20, FY21, and FY22. Recently, the company also announced its financial results for the ongoing fiscal year, which saw the revenues in H1 of FY23 grew 24 per cent to Rs 2,905 crore and losses stood at Rs 333 crore.

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