Hit hard by the recent hike in power tariff and the introduction of luxury tax, owners of guesthouses, a preferred destination for budget travelers, have decided to hike their charges by 25%.
The guesthouse owners had so far been wary of increasing room rates for fear of losing tourists. According to them, unless there is a rollback, they will be left with no other option but to hike their charges.
Nearly 16,000 guesthouses will hike their room rates, said Arun Gupta, president of Hotel Mahasangh.
According to him, guesthouses that charge between Rs. 300 and Rs. 3,000 per room will now pay taxes on a par with five-star hotels without enjoying similar benefits.
Unlike five-star hotels, guesthouses are not allowed to run restaurants or bars.
The guesthouse owners have also threatened to hold demonstrations against the “luxury tax” and the hike in electricity tariff. They said they have to pay higher electricity charges as guesthouses are considered commercial users.
“There was no need to impose new charges and power tariff on guesthouses which are already paying taxes under 10 different heads,” Gupta said.
There are a total of 20,000 guesthouses and small hotels in Delhi, 700 of which are located in Paharganj alone.
According to the Mahasangh’s records, 67% of all foreign tourists coming to Delhi choose guesthouses and budget hotels.
“When the government can give so many relaxations to bed-and-breakfast schemes and five-star hotels, why ignore low budget guesthouses? We are already paying water, house, and conversion and parking charges to the government. We plan to hold demonstrations outside the CM's office,” added Gupta.