Kavya Rawal, Ahmedabad: The goods and services tax (GST) has disrupted travel plans during the first festival season since the introduction of the long-delayed tax reform, say travel agencies as well as people who have either changed or cancelled their travel arrangements, and the number of Gujarati travellers is expected to fall by as much as 30 percent during this period.

International destinations have made way for domestic ones, and there has been a drop in enquiries for high-end destinations as travellers from Gujarat opt for more affordable ones this Diwali holiday season.

“People are changing their travel destinations from international to domestic after GST as they are inexpensive in comparison to international destinations. There has been a decline of 30 percent in the number of people travelling after GST,” said Shailesh Agrawal, director at Vanguard Holidays India Ltd.

“In comparison to last year, less business is being seen this year. GST as well as demonetization have affected the travel plans of Gujaratis. Service tax on hotels was earlier 18-22 percent; under GST it has increased to 28 percent,” said Manish Sharma, managing director at Akshar Travels Pvt. Ltd.

Under the GST regime, which came into effect on 1 July, hotel rooms attract a tax rate of up to 28 per cent.

“GST has surely affected my travel plans this year. My family and I have changed our destination from Dubai to Goa as the difference in the budget was huge,” said Mrunal Ved, a fitness trainer.

Zarna Thaker made a similar decision. “My family and I were planning to go to Bangkok, but now we’ve changed our destination to Uttarakhand because of GST,” said Thaker, who is a manager in the cardiac surgery department at Heart Care Associates.

Some have also opted to cancel their travel plans entirely.

“I had to cancel a trip that my friends and I had planned to Singapore because of GST. When we saw the rates after GST, they were too expensive for our pockets,” said Vanraj Shastri, a musician.

In addition to a shift from international and high-end destinations to domestic, easier-on-the-pocket ones, travellers are also shortening their vacations, while there has been an increase in group bookings.

“Because of GST, people are cutting the cost of their travel. They are saving more on hotels. People are travelling, but more to local destinations and they are reducing the span of the holidays,” said Urjit Thaker, the owner of World Wide Travels.

“Every sector saw instability due to GST. People are postponing their trips to next year. There has also been a drop in the number of people who are willing to travel during this period,” said Aalap Modi, director at Ajay Modi Travels Pvt. Ltd.

Top international and domestic destinations

For Gujarati tourists this year, Goa, Kerala and Jaipur, Udaipur and Kumbhalgarh in Rajasthan are the top domestic destinations, while on the international front, Singapore, Hong Kong, Thailand, Malaysia and Bali in Indonesia are at the top of the list, according to travel agencies.


“People are changing their travel destinations from international to domestic after GST as they are inexpensive in comparison to international destinations. There has been a decline of 30 percent in the number of people travelling after GST."
Shailesh Agrawal, director, Vanguard Holidays

 


  “In comparison to last year, less business is being seen this year. GST as well as demonetization have affected the travel plans of Gujaratis. Service tax on hotels was earlier 18-22 percent; under GST it has increased to 28 percent."
 Manish Sharma, managing director, Akshar Travels

 

 


“My family and I were planning to go to Bangkok, but now we’ve changed our destination to Uttarakhand because of GST."
Zarna Thaker, manager, cardiac surgery department, Heart Care Associates
 


 



“I had to cancel a trip that my friends and I had planned to Singapore because of GST. When we saw the rates after GST, they were too expensive for our pockets.”
Vanraj Shastri, musician